Oral Answers to Questions

INTERNATIONAL DEVELOPMENT

The Secretary of State was asked—

Education Provision

Jim Sheridan: How his Department is helping to provide education for the poorest children.

Hilary Benn: The Government are committed to help to get as many boys as girls into school by 2005, and all children into primary school by 2015. Last week, I published "Girls' education: towards a better future for all", which sets out our plans to spend £1.4 billion on education over the next three years. That money will support partner Governments, including those that want to get rid of school fees, as well as the fast-track initiative and UNICEF's girls' education initiative.

Jim Sheridan: I thank my right hon. Friend for his answer and congratulate him and his Department on their work. It is, however, a sobering thought that more than 100 million children are currently without education, over half of them young women. Will my right hon. Friend expand on what education projects he is involved in to help young women who face barriers that young men may not face?

Hilary Benn: That is an extremely important question. Most children who are not in school with a teacher, a classroom and a desk are indeed girls. A practical example of our projects is the one on which we are embarking with UNICEF in Nigeria, focusing on states in the north of the country. It will involve, for instance, buying school uniforms to help to get girls into school. That is one of the obstacles that families face—not just formal school fees, where they exist, but the cost of books, materials and uniforms.
	We need people to knock on the door in the morning and say, "Come on, we are off to school", to make sure that girls attend. It is also important to deal with problems of water and sanitation. If there are no separate toilets for girls, many parents will not let their girls go to school. The same applies if there is no clean water. There is also the problem of girls who have to work.
	We are trying to deal with all those issues and we are increasing investment substantially to give Governments the capacity to provide the education that children deserve.

Jenny Tonge: The Secretary of State will know that to qualify for debt relief, Uganda had to introduce fees for primary education. As a result, many children, especially girls, did not receive any education during that period. Will the Secretary of State assure us that other countries and other children will not suffer the same fate to qualify for debt relief ?

Hilary Benn: Whatever has been done in the past, there is absolutely no point in providing debt relief if one of the consequences is that it becomes more difficult for children to go to school. That is why we have said that if the developing country Governments whom we are helping to send more children to school with our increased investment want to abolish fees, we will support them.
	I can give another example of what we have already done. When Kenya's new Government, elected in 2002, wanted to get rid of school fees, we helped to pay the cost—Britain paid £10 million—along with other countries. As a result, 1.2 million more children are now at school with desks, textbooks and teachers than was the case in 2002. That is a practical expression of our commitment.

Ann Cryer: Will my right hon. Friend look into the lack of provision of village schools in Mirpur, an area in Azad Kashmir? In fact, I am motivated by enlightened self-interest: the provision of such schools where there are none would assist the economic well-being of my constituency.

Hilary Benn: My hon. Friend raises an important point about the need to ensure that education is provided everywhere, including in rural areas—not least because we know that sending girls to school improves their health. They will have fewer children, who will grow up healthier and will be more likely to go to school themselves when they reach school age.
	We are working with the Pakistan Government, helping them to improve health and education. We are currently working with particular states on which we are focusing our effort, but I am very conscious of the importance of rural education everywhere, including in Azad Kashmir.

Stephen Dorrell: Does the Secretary of State agree that policy on development assistance is not just a matter of the total quantum of development aid from the Government? Is it not—perhaps more important—also about the quality of the aid programmes that are supported? What the right hon. Gentleman has said about the importance of education as part of the development programme is welcome, but can he tell us what he is doing to ensure that the same importance is attached to education in the aid programmes of our multilateral aid partners, particularly the European Union and the United Nations?

Hilary Benn: I agree about the importance of not just increased but better, more effective aid. In the near future we will meet in Paris to address precisely the question that the right hon. Gentleman has raised, to ensure that all aid—including the increased aid that is being provided—is used as effectively as possible.
	In ideal circumstances, if a developing country partner Government have the capacity to use aid effectively to implement their own plans to get children into school—and much of our work is intended to improve that capacity—that is the best course of action. If we have to work in other ways because the capacity is not there or because we cannot trust the other Government to use the aid effectively, we will use other methods as well. As the right hon. Gentleman says, however, all of us—bilateral and multilateral donors—must ensure that every pound, dollar and euro that we put in has the maximum effect in achieving objectives that the whole House will share.

UN Reform

Chris Bryant: What assessment his Department has made of the implications for international development of the high level panel's recommendations for reform of the UN.

Hilary Benn: I welcome the report of the high level panel, which, together with the report of the UN millennium project, will be discussed at the UN millennium review summit in September. Both reports stress that security and development are closely interlinked: neither is possible without the other. In particular, I welcome the proposal for a peacebuilding commission to enable the UN to help prevent or resolve conflict. The Government plan to launch a public consultation on the panel's findings later this month.

Chris Bryant: The panel's excellent report makes the point that poverty and infectious diseases pose just as much of a threat to international security as serious crime and terrorism. It also makes the point that there is not enough co-ordination of international development around the world and that the UN still has some way to go to ensure that co-ordination is always effective. How do the Government view proposals to change the UN, so that we can ensure that international development is at the top of the priority list?

Hilary Benn: The millennium summit in September will provide an opportunity for the world to focus on all those questions. The UN is only as strong and effective as its member states permit it to be. That is certainly the case when it comes to taking decisions in the UN Security Council about what action to take in respect of states that are failing. From a development point of view, we must be interested in the issues that were raised by the high level panel in dealing with conflict. Many poor people live in states that have failed, are failing or are being destabilised by AIDS, TB, malaria, systems that do not work and Governments who do not function effectively. All of us have a responsibility to use the opportunity that the debate around the high level panel will present to ask ourselves questions about the effectiveness of what we do and the effectiveness of the international system that we have created.
	On humanitarian issues, my hon. Friend may be aware that I have made some specific proposals to reform the way in which the UN works because I think that we could do it better.

Michael Connarty: I am grateful to the Secretary of State for that reply. Does he accept that we have gone through a period in which the United Nations has been destabilised and devalued because of unilateral decisions on security, and that there is an opportunity now to establish the UN again as the principal organ for international development and aid and to deal with the problems in a balanced way, so that security considerations for individual countries do not undermine its power in the international development sector? Will he give a commitment that our Government will try to do everything possible to put the UN back at the centre of international politics?

Hilary Benn: As my hon. Friend knows, Britain has for a long time been a very strong supporter of the UN. It is the best instrument that we have for trying to deal with the difficult questions that the world faces. However, that does not take away from the responsibility that we face collectively, through the UN, to live up to the principles in the charter that was established at the end of the second world war to provide protection, support and help to those in need. As he knows, those are very difficult questions, on which member states sometimes disagree, but we must ask how we can make the system more effective. The UN should be in the lead, as it has been in responding to the earthquake and tsunami on Boxing day.

Tom Brake: When the Secretary of State launches his consultation, will he ensure that there is extensive consultation on the panel's call for global public health capacity to be rebuilt, and that the Indian Government in particular are involved? Their Health Minister stated yesterday that emigration of health specialists from India to the United Kingdom is having a damaging effect on their health system. Indeed, no fewer than 9,000 of them emigrated in 2003 to the UK.

Hilary Benn: We certainly welcome participation in and responses to the consultation from all who want to contribute, including other Governments if they are so inclined. The hon. Gentleman raises an important issue about health capacity. The question that developing country Governments are increasingly asking themselves, rightly, is: why are people leaving? He knows the answer. It is to do with poor pay, working conditions and the lack of opportunity to use the medical knowledge that their training has given them. In some cases, it is to do with the lack of accommodation to work as a GP in a rural community. We must address those questions, as well as strengthen, as we are doing, the code of practice in the UK to ensure that we do not recruit directly from developing countries. However, unless the factors that drive people to leave developing countries and to work elsewhere are addressed, countries will find it difficult to hang on to the skilled health professionals whom they have trained.

Montserrat

Colin Pickthall: If he will make a statement on the humanitarian situation in Montserrat.

Gareth Thomas: Montserrat continues to make progress in its recovery from the volcanic activity of the mid-1990s. Now that essential public services are in place, the island authorities are working to attract new inward investment and tourism, which will be further aided when the island's new airport becomes operational in the spring. During my visit last June, I pledged a further £40 million-worth of assistance, bringing our total aid to almost £250 million since the start of the crisis.

Colin Pickthall: I thank my hon. Friend for that reply. Given that Montserrat still faces serious problems as a result of its reduced population, particularly of young people, what prospect is there of the United Kingdom, and perhaps the European Union as well, seriously encouraging business and commerce—jobs—into the island to help retain its young people and, hopefully, to help encourage some who were dispersed from the island following the eruptions in recent years to return home?

Gareth Thomas: My hon. Friend is right to say that the key to retaining young people on the island is opening up more job opportunities, but we also need to improve access to the wider Caribbean. That is why the airport is important. It is due to open in the spring. It was built not only with UK Government money, but with Commission money. We are also working closely with the Government of Montserrat on identifying further ways to create opportunities for business, including increasing businesses access to finance to enable them to set up and expand, and increasing access to business expertise. We are further working with the Government of Montserrat on the island promoting itself as a tourist destination.

Martin Smyth: I welcome what the Minister said about those improvements, but is he concerned to learn that those who found a home in the United States under the temporary settlement provision have been told that they should now leave? Some of them are unwilling to return to a country of which a large part is uninhabitable and where the fear of earthquake tremors remains.

Gareth Thomas: The hon. Gentleman is right—some 290 Montserratians left the island and went to the United States under the temporary protected status option and their right to stay under those terms ends on 27 February. Many of them are looking to regularise their status in the US, but those who cannot do so have the opportunity, as British passport holders, to go to the UK or elsewhere within the European Union, or to return to Montserrat. The Government of Montserrat are considering what else they need to do to make Montserrat an attractive destination for those who might return there.

Jeff Ennis: Obviously, many of the problems in Montserrat were created by volcanic activity and the destruction of the infrastructure, particularly in the south of the island near the former capital of Plymouth. It is good news that the airport will open shortly, but when will the new port be developed, which will ensure that we can get back to the island the cruise ships that will provide economic prosperity for the islanders?

Gareth Thomas: As my hon. Friend will know from his visit to the island and his work with the all-party group on Montserrat, at the moment the port is able to cope with all the various traffic through it. However, in conjunction with the Government of Montserrat we are looking at whether further expansion of the port is necessary. They will clearly have to work up a proper business case for that proposal. We are also working with them on the nearby development of Little Bay, the new capital, which will be the potential catalyst for more private sector development on the island.

Tsunami

Liam Byrne: What lessons his Department has learned from dealing with the consequences of the tsunami of 26 December 2004 in the Indian ocean.

Hilary Benn: We will seek to learn lessons in reviewing the Department for International Development's immediate response to the tsunami once the relief phase is over, as we do for all significant humanitarian crises. We will also encourage the international community to do the same. The main issues, in my view,   are co-ordination, transport and logistics and information. We will, of course, also monitor the effectiveness of our continuing support over the coming months.

Liam Byrne: I thank my right hon. Friend for that reply. In common with many families, I spent most of Boxing day worrying about relatives travelling in the region. Since the tsunami, have we not also learned fresh lessons about the generosity of the British people? Readers of the Birmingham Evening Mail have already raised £120,000 to send to people in need; others have given up their comforts here to go in person and help those abroad. Is it not a clear signal that one of the greatest assets that we have in responding to these disasters is the skill and generosity of our compatriots?

Hilary Benn: My hon. Friend is absolutely right and I am sure that the whole House would want to pay tribute to the generous instinctive response of the British people. One of the lessons that we have all been reminded of, if we needed to learn it, is that we now understand that our neighbours are not just the people who live in our street in the local community; they are also the people whose names we do not know and whose faces we have never seen and who live on the other side of the world, and with whom we feel an instinctive common bond when they are in distress. If we can do that in response to the tsunami, I refuse to believe that we cannot bring the same passion, commitment, energy and determination to tackle what I call the silent deadly tsunamis that kill thousands of people every single day.

Michael Fabricant: The right hon. Gentleman is quite right to point to the generosity and compassion of our compatriots in respect of the work done to relieve the suffering caused by the tsunami. He is also right about the instantaneous reaction that we made to it. But what steps can his Department put in place to ensure that long-term relief is carried out adequately and correctly and that it is properly targeted? We also need to ensure that there is no corruption and we must prevent aid money drifting away into Government departments overseas rather than relieving the suffering of those for whom it was intended.

Hilary Benn: One way to achieve that is through the generous donations that the British public have made through the relief agencies—Oxfam, Save the Children and others—that make up the Disasters Emergency Committee. That ensures that the money is not used only for immediate relief. So much money has been raised that it is possible to spend it on reconstruction. Secondly, the World Bank must lead, following the plans drawn up by the Governments. It is important to have clear structures in place to audit where the money goes and what it is used for. That provides a real opportunity for the Governments of the countries concerned to demonstrate their continuing commitment to fight corruption and to set up the structures in a way that responds to the question that hon. Gentleman quite rightly asked.

Hywel Francis: As part of a Commonwealth delegation, I recently met citizens in the Indian ocean and witnessed some of the devastation caused by the tsunami. Does my right hon. Friend have any views on how the Commonwealth can best help the United Nations to assist the countries that have been devastated by this terrible event?

Hilary Benn: Together with many other countries, Commonwealth countries can help both through the support that they can give to the practical relief effort, including working with the affected countries to put a desperately needed early warning system in place, and by providing assistance with the reconstruction process. The whole world, the Commonwealth included, can be proud of how it has responded to fellow human beings in distress. It is also important, as hon. Members on both sides of the House clearly believe, to follow through the help in order to assist the countries that have been traumatised by the loss of life. I saw it for myself during my visits to Banda Aceh and Batticoloa in the east of Sri Lanka. It will take time for people to recover from the trauma and we all have an obligation to help them to do so.

Patrick Cormack: Following up the Secretary of State's comment a few moments ago, how close are we to having an early warning system installed and what resources are being devoted to it?

Hilary Benn: That matter has been discussed by the Association of South East Asian Nations and at the Kobe conference on disaster reduction, which my hon. Friend the Under-Secretary attended. It is now widely agreed that an early warning system must be installed in the Indian ocean. We and others will support its establishment; it will not cost a huge amount of money. There is some discussion about exactly where the base for the early warning system will be. One of the most important lessons to learn is that we can put in place systems that will help those countries—should, heaven forbid, such a disaster happen again—to warn people to get out of the way if they can.

Andrew Love: There has been concern that aid has not been distributed fairly in Sri Lanka. When Kofi Annan visited recently, he was not allowed to go to the north and east of the country. Will my right hon. Friend reassure the House—and those of my constituents worried about the situation—that he is monitoring aid relief in Sri Lanka, and that aid is being distributed equally in both communities there?

Hilary Benn: I can offer my hon. Friend that assurance. I discussed this matter when I visited Batticoloa in the east of the country. That is in the middle of the territory held by both Government and Liberation Tigers of Tamil Eelam forces. We are keeping a close eye on the problem, about which concern has been expressed. There have been difficulties, but our view is that, by and large, relief is getting to the people who need it. When I was in Batticoloa, part of the relief was being provided by the crews of HMS Chatham and HMS Diligence. They had been putting up tents for people who had lost their homes and helping to clear out water tanks contaminated by sewage water. They are also helping to repair fishing boats. That is another example of the practical support provided by the UK to help those people in Sri Lanka so badly affected by the disaster.

Julian Brazier: The Secretary of State's answers are welcome, but I want to draw his attention to some less attractive lessons arising from the tsunami-affected area. Is he happy that the EU ended the special arrangements for imports from Indonesia and Sri Lanka just six days after the tsunami? Oxfam calculates that that decision will cost 100,000 jobs in Sri Lanka alone. Is not there a lesson in that for free trade and fair trade?

Hilary Benn: I acknowledge the hon. Gentleman's point about the timing of the decision, but he will be aware also that the general system of preferences will be accelerated to provide some offset against the impact of that decision. What matters now is that the resources that the world has put into the immediate relief effort should provide support to the affected countries in rebuilding their own economies. That applies in particular to the fishing fleets of Sri Lanka and Indonesia, which have suffered so much.

Tsunami (Fish Imports)

Graham Allen: If he will make representations to the Department for Environment, Food and Rural Affairs and the EU to change the tariff regime on fish imports from Sri Lanka and the Maldives to assist the rebuilding of the fishing industry following the tsunami.

Gareth Thomas: We recognise the importance of helping fishing industries to recover following the tsunami in Sri Lanka and the Maldives and we are working with the European Commission to accelerate the new generalised system of preferences that is the key means through which the EU grants preferential market access to imports from developing countries. The move to bring forward the GSP from July to April 2005 will benefit several countries affected by the tsunami.

Graham Allen: Most of the tuna that we eat in this country comes from Sri Lanka and the Maldives. Does my hon. Friend accept that, even before the tsunami, the general tariffs levied on the fishing industries in those countries were having a detrimental effect? In the wake of the tsunami, will he discuss with his colleagues how we can ensure a more equitable means of taxation of tuna imports, so that fishing villages in those countries can be helped to recover?

Gareth Thomas: As my right hon. Friend the Secretary of State made clear earlier—and as I said in my answer to my hon. Friend's original question—the fact that the new GSP is being accelerated is a sign of the European Commission's concern about the tsunami's impact on the fishing industry in those two countries, and of its desire to help. To complement that measure, the Commission is considering relaxing the rules governing origin requirements under the GSP. I understand that it will discuss with EU member states this Friday whether additional trade policy measures are required to help the tsunami-affected countries. We will, of course, look sympathetically at such measures.

Alan Duncan: Is it not verging on the obscene that poor countries that benefit enormously from trade with us and other nations face obstacles to the sale of their products? May I invite the Minister to reaffirm his support for the contents of last year's Treasury document about the global economy? Is it not a fair reflection of that document to say that it asserts a presumption in favour of free trade, but calls—as do the Opposition—for a measure of transitional protection for less-developed poor countries, which need time and support to build their capacity to trade on fair terms?

Gareth Thomas: The hon. Gentleman is right to say that we need freer and fairer trading rules. The new GSP arrangements are a step in that direction, as I have made clear. We are looking at what special and differential treatments we need to offer developing countries to help them as part of the Doha development round process. As I said, the European Commission is also willing to discuss with member states affected by the tsunami what other trade-related measures it can introduce to help get fishing industries on the road to recovery.

Alan Duncan: If that is the case, will the Minister take issue with the undue simplification of the matter contained in charity advertisements, which even liken free trade to the blight of AIDS, droughts and tsunamis? Is not it absurd to appear to condemn free trade as such when it has the greatest potential to be a motor for wealth creation in poor countries? The enemy is not free trade, but economic weakness. Will the Minister reassert his belief in free trade in principle and join us in saying so—and in saying that we want free trade to be fairer and fair trade to be freer?

Gareth Thomas: As I have made clear to the hon. Gentleman, we want freer and fairer trade. I welcome his conversion to that cause. It is a pity that he and his party did not seek to do anything about it when they were in government.

PRIME MINISTER

The Prime Minister was asked—

Engagements

Julian Brazier: If he will list his official engagements for Wednesday 2 February.

Tony Blair: Before I list my engagements, I am sure that the whole House will join me in paying tribute to the brave service personnel, both Royal Air Force and Army, who were on board the RAF Hercules that tragically crashed on Sunday. At this sad time, our thoughts and prayers are with the families of all those on board. As the Chief of the Air Staff made clear on Monday, it will be for the board of inquiry to establish the cause of the crash and it would be wrong for anyone to speculate at this point. The investigation will be complex and it may take some time to establish the exact cause of the crash.
	It is doubly tragic that the crash happened on a day of such hope in Iraq. The Iraqi people showed great courage in exercising their democratic rights and I know that all of us welcome the birth of Iraqi democracy.
	This morning, I had meetings with ministerial colleagues and others and, in addition to my duties in this House, I shall have further such meetings later today.

Julian Brazier: The world rightly admires the courage of the Iraqi people in the recent election. However, I wish to press the Prime Minister on his attitude to our armed forces, whose courage helped to make that result possible. What reply did he give to my constituent, the sister of a severely wounded soldier, when she wrote and asked him how he had found time in his busy week to drop a personal line to Ozzy Osbourne when he fell off his quad bike, when not one member of the Cabinet has written to or visited her brother or any of the other 600 British soldiers wounded under the Prime Minister's direction in Iraq?

Tony Blair: I am sorry that the hon. Gentleman makes his point in that way. Everybody in the House believes that our armed forces are courageous people who have done an immensely worthwhile job in Iraq. We should be and are proud of them. We grieve for the families who have lost their loved ones and we will give every support that we possibly can to those who have been wounded in action. That is the case for me and I believe that it is true for the Government, but it is also true for every Member of this House.

Clive Soley: Will the Prime Minister think back to all those Jeremiahs who have tried to talk down the success of the British economy, despite the fact that we have just had our 50th quarter of progressive growth? Will he comment on why he thinks those Jeremiahs keep getting it wrong?

Tony Blair: Not merely have we had the longest period of consecutive economic growth, but 2 million more people are now in work. Low unemployment has saved us some £21 billion since we came to office. Most of all, the new deal has helped 1 million people off benefit and into work. That is a remarkable achievement for that programme and that is why this Government, unlike the Conservative party, will keep that programme in being, to help people off benefit and into worthwhile work.

Michael Howard: May I, on behalf of the Opposition, express my deepest sympathy with the families of the brave men who lost their lives when the Hercules went down on Sunday? It is an acutely painful reminder of the sacrifices made at our behest and on our behalf. We mourn their loss and pay tribute to their courage.
	Last week, the Government announced their plans for detention without trial on the order of the Home Secretary. This morning, we have put forward an alternative approach based on the proposals of the Newton committee, set up by the Government to consider these issues. It would involve giving those decisions to a court, not to a politician, allowing intercept evidence to be used and detaining those found guilty in prison, not at home. Will the Prime Minister undertake to look carefully at those proposals before taking any further steps along what I believe is a dangerous path for the Government to follow?

Tony Blair: Yes, of course we will. It is important that we look at proposals from any quarter. I have not had an opportunity to study those proposals in detail, but I should say that it is our intention to have a judicial process. The difficulty will arise over the use of intercept evidence in court, and the question, if the security services are obliged to produce that evidence in court, will be whether they feel that they cannot do that without compromising intelligence sources. That is the problem that we have tried to wrestle with for the past few years.
	I think that everyone who takes a responsible attitude to these matters realises that any such powers should be used only with the greatest hesitation and only in circumstances that really demand them. My concern is that if we have people in this country whom the security services believe to be a threat to the security of the country, nothing must stand in the way of protecting the security of our people.

Michael Howard: There are difficulties with intercept evidence, although they have been overcome in almost every other country. There are even greater difficulties with detention without trial. Of course we must fight terrorism, but we must also be vigilant in defence of our freedom. It is of the utmost importance that in doing what is necessary to protect life we do not lose sight of the need to protect our way of life. Will the Prime Minister agree to meet me to see whether we can agree on a way forward that will command wide public confidence on these vital issues?

Tony Blair: I am perfectly happy to meet the right hon. and learned Gentleman, and indeed any of his colleagues, to talk about these issues. Of course it is true that there is a balance to be struck between protecting our way of life and protecting our citizens. The legislation that we introduced, which was ruled unlawful by the House of Lords, is legislation under which 17 people have been detained. I do not minimise the importance of that; I simply set it against the 700 people who have been arrested for various offences connected with the possibility of terrorism since September 11.
	We are desperate to avoid a situation in which, later, people turn round and say, "If only you'd been as vigilant as you should have been we could have averted a terrorist attack." I think it is right to call this a new form of global terrorism—it is different. Let us be clear: 200 people died in another European capital city, Madrid, but if the terrorists' plan had succeeded, they might have killed more than 1,000 people. That is the difficult balance that we are trying to strike. I entirely agree that we have to strike it so that there is respect for civil liberties as well as our security. We have tried to do that.
	The right hon. and learned Gentleman said that other countries had easily overcome the issue of intercept evidence, but I have to say that that is not my understanding. It has been difficult for them and it has not always worked. I am happy to have discussions with him and his colleagues about the issues, to see whether we can find a common way through the problems. Obviously, it would be of assistance to the country if we could do that. I ask him to understand, however, that we propose these measures only after the deepest thought.

Gisela Stuart: Yesterday, I met a constituent of mine who came from Iraq. He proudly showed me his ink-stained finger and told me how he and his family had voted and how it was one of the proudest and happiest days of their life. Will the Prime Minister give the House an assurance that we will continue to support the Iraqi people for however long it takes, so that they can establish a democratic and peaceful Iraq?

Tony Blair: I thank my hon. Friend for that. She is right. It was heart-warming to see millions of Iraqis, whatever the intimidation and the threats against them, disprove everybody who put forward the theory that there are some people who are in favour of democracy and others who are not. The truth is that given the chance, human beings everywhere want to live in a democracy, not a tyranny. What the Iraqis have done is magnificent, but my hon. Friend is right. We must stay there—not quit the course, but stay the course—and make sure that we see them establish democracy, with their own security forces, their economy under their own control, in charge of their destiny, as a democratic country. If they do that, the impact will be felt not just in Iraq, but across that region and even on the security of this country.

Charles Kennedy: On behalf of my right hon. and hon. Friends, I extend our sincere sympathies to the families of the RAF and Army personnel who so tragically lost their lives in the course of their brave duty in Iraq last weekend.
	In the exchanges a few moments ago, the Prime Minister mentioned his desire to build a judicial process. Can we take that to mean that he recognises that it can never be acceptable for a Government Minister acting alone, at his sole discretion, to be able to imprison an individual, and that that decision must always be for a judge, not a politician?

Tony Blair: It is right to point out, though, that under the existing procedure such a decision is subject to a review by a court headed by a judge. The issue is the one raised by the Leader of the Opposition, which is to do with the nature of the evidence that can be put before the court. The problem, as I have tried to explain, is whether by putting the evidence before the court, we compromise the sources upon which it is based.

Charles Kennedy: I recognise that there are differences of view. We opposed the original legislation that led to the current position, whereas the Conservatives did not. We would all accept that it is the fundamental duty of Government to protect their citizens. The issue is that in so protecting their citizens, the Government must also uphold their fundamental civil rights. Would not it be a better way forward for the Government to create a new offence of acting towards planning acts of terrorism? If prosecution was still impossible, any control orders should be issued by judges, not by politicians, should be time-limited and should, of course, require the highest possible burden of proof.

Tony Blair: The very issue whether it was possible to do that by creating a new offence was one thing that we considered and found that it did not work. The right hon. Gentleman is right to say that we must protect the civil liberties of British citizens, as well as take action in respect of our security. The question is, when those two things come into conflict, how we navigate our way through in order to give our citizens the maximum security. The problem that we had with the previous legislation is that people said it applies to foreign nationals but not to British nationals. That is why we decided to take that on board and apply it both to British nationals and to foreign nationals in respect of the different type of solution that we have now put forward.
	I say to the right hon. Gentleman and to the whole House that the one thing I will not do as Prime Minister is engage in anything that I think puts the security of our country at risk. That is paramount for me. Since September 11 we have had hundreds of arrests in respect of that new type of terrorism. We must take seriously, therefore, the threat that it poses. I agree that only in the most extreme circumstances should we curtail the normal rights of our citizens, but in this limited way this is an extreme set of circumstances. We must be sure, therefore, we are protecting our citizens' security.

Clive Efford: Will my right hon. Friend reaffirm his commitment to building schools for the future, to decent homes for tenants and providing state of the art facilities for sports in our communities? In my borough over the next 10 years my local authority will transform every secondary school by investing £325 million, which was opposed by the local Tories. It is spending more than £200 million providing decent homes for tenants, which was opposed by the Tories, and building a £20 million leisure centre in my town centre, which was opposed by the Tories. Apart fromadmiring their kamikaze-style manifesto—[Interruption.]

Mr. Speaker: Order. The Prime Minister can try to reply to that.

Tony Blair: I think that I catch the drift of my hon. Friend's question. The Tories in his area are not a very good lot, I think, and that is pretty typical because, overall in the country, they are now committed, through their plans, to cutting £1 billion from the sustainable communities programme, and that means cuts in housing support, in social housing and in regeneration, which, as I saw for myself the other day in east Manchester, are programmes that have done an immense amount of good. It is truly tragic that the Conservative party has learned nothing from seven years of opposition.

Andrew Robathan: I was in Iraq for Sunday's elections and I was hugely encouraged by the determination of the Iraqi people to vote for their future. I met many British servicemen and women doing an excellent job on our behalf in the service of this country under difficult and dangerous circumstances, so I asked them if they were registered to vote, and eight out of 10 said no. Is the Prime Minister aware that his policies have disfranchised the armed forces and that his Defence Ministers know full well the situation and are deliberately dragging their feet, doing nothing about it? Will he personally ensure that every serviceman and woman and their spouses receive a service voter registration form by the end of this month in time for the pending general election?

Tony Blair: I will personally look into that and ensure that service people are given the right to vote. I was not aware of the situation to which the hon. Gentleman refers. On a better and more consensual note, let me say that I am pleased that he and other Members of the House went to Iraq and saw the free elections there, and I entirely agree with him, both about the spirit in which the Iraqis voted, but also about the tremendous work done by our troops in the south of Iraq.

Mark Hendrick: Will my right hon. Friend join me in congratulating Paul Stephenson on becoming the new deputy commissioner of the Metropolitan police? My right hon. Friend will be aware of the excellent work that he has done as chief constable of Lancashire in turning it into the top police force of the 43 in England and Wales, reducing crime significantly, and, due to his expertise and skill and the investment of this Labour Government, turning Lancashire into one of the safest counties in the country.

Tony Blair: Paul Stephenson has done a superb job there and I am delighted at the appointment that he has now achieved. I am sure that crime will continue to fall in Lancashire, as it is falling elsewhere in the country.

Michael Howard: Two years ago, the Government very sensibly changed the law to stop burglars suing householders unless the force used was "grossly disproportionate". Why was that test used?

Tony Blair: Because we believed that in those circumstances it was necessary to do it because the actual law was unclear. The law, however, in relation to the right of defence against burglary has now been made crystal clear by the police and the Crown Prosecution Service. [Interruption.] Yes, it has. It is now absolutely clear that the only circumstances in which anyone will ever be prosecuted for attacking a burglar in their home are the most extreme circumstances. The police have said that and the CPS has said that, and the only people trying to raise doubt in the public mind are the Tories.

Michael Howard: But what on earth is the need for two tests? Why should not the same test be used to decide whether householders should be prosecuted? Does not the Prime Minister realise that that is exactly what is proposed in the Bill that will be before the House on Friday?

Tony Blair: The question is: are there householders who are being prosecuted for—[Hon. Members: "Yes!"] The answer to that from the police and the CPS, who I think know rather better than the Conservatives, is no, they are not being prosecuted in those circumstances. When they went back over the last 15 years they could find only a handful of cases in which such prosecutions had been mounted, which is no doubt why back in November the right hon. Gentleman said:
	"It is not necessarily the law that is wrong but the way it is being implemented."
	He then went on to say:
	"I know you're keen on this but I'm being straight-forward with you."
	Unfortunately, no longer.

Michael Howard: Why does the Prime Minister persist in saying that there have been only a few prosecutions? The CPS itself has said that the number that it is has given, 11, was only the result of an informal trawl, and The Sunday Telegraph found seven more examples in a search lasting less than an hour. The Government leaflet only adds to the confusion. It introduces a wholly new phrase, "very excessive and gratuitous force", to make the muddle even worse. Let me read him another extract:
	"A rugby tackle or a single blow would probably be reasonable".
	That sounds like guidance for the Whips Office. Does he not understand that the answer is not to issue confusing guidance, but to change the law? Is it not time to think again on this issue, for common sense to prevail and for him and his colleagues to join us here on Friday in backing the private Member's Bill?

Tony Blair: It is correct that the CPS found 11 cases and that The Sunday Telegraph found seven. That is over 15 years, and only a handful of them ever resulted in prosecution. If the right hon. and learned Gentleman has gone through the list, as I have, he will have seen that each of those cases was wholly exceptional, as one would expect. The real point, surely, is this: the police and the Crown Prosecution Service, and to be fair, large parts of the media today, have made it clear that a person is entitled to attack a burglar who is in their own home. Therefore, the person who is actually trying to sow confusion for his own usual reasons of opportunism is the right hon. and learned Gentleman. The reason why he wants to focus on this issue is very simple. I have done a comparison between the number of burglaries when he left office as Home Secretary and now. Perhaps he can confirm it when he gets up. There were 200,000 more burglaries a year when he was Home Secretary than there are today—right or wrong?

Hon. Members: Answer.

Michael Howard: rose—

Mr. Speaker: Order. I have told the House before that the Leader of the Opposition does not have to answer any questions. [Interruption.] Order. There is no point in any hon. Members shouting "Answer"; he does not have to do it.

Michael Howard: I will answer it, Mr. Speaker—[Interruption.]

Mr. Speaker: Order. Mr. King, you had better behave yourself, because if I suspend the House, the Prime Minister of the day will have to wait until I come back to the Chair. It is as simple as that.

Michael Howard: All anyone needs to know about my record as Home Secretary is that crime fell 18 per cent. in those four years—more than ever happened before, and more than has happened since.
	The question that I pose to the Prime Minister—I have already put it to him twice, and he has twice failed to answer it—is a very simple one: why do we need two different tests in the same area of law? The Government introduced the "grossly disproportionate" test to stop burglars suing householders. Why will they not use the same test to stop householders being prosecuted?

Tony Blair: For the reason I have just given. The law is clear, and it has been made clear again by the police and the Crown Prosecution Service. Surely, the responsible thing for the right hon. and learned Gentleman and his colleagues to do, given that the police and the Crown Prosecution Service are both saying that it is only in the most extreme circumstances that people will ever be prosecuted, and given that it is now absolutely plain that everyone understands that they can of course protect themselves against a burglar in their house, is clear. Would it not be more sensible, if he actually wanted to help people in this country, if he joined the police and the Crown Prosecution Service instead of pursuing his own usual petty opportunism?

Martin Linton: Will my right hon. Friend visit the Share Association, a voluntary organisation in my constituency that has had spectacular success in training and finding jobs for people with disabilities, because it works on the principle of what people can do and not what they cannot do? Is not that the principle that should guide us in any reform of the benefits system?

Tony Blair: My hon. Friend is absolutely right. My right hon. Friend the Secretary of State for Work and Pensions outlined the proposals earlier. It is important to realise that, under this Government, about 1 million people have moved off benefit and into work. The flow on to incapacity benefit is already 300,000 down from the time when we came to office, but it is also true, as my hon. Friend rightly implies, that we now need to do more, because there are large numbers of people who are on incapacity benefit or will come on to it in future who could be helped back into work. We need to ensure that those who can work are helped back into work, and that those who genuinely cannot do so are given real support. That is what the proposals will do.

Philip Hammond: Since 1998, total grant to the Prime Minister's local council of Sedgefield has gone up by 68 per cent. Over the same period, the total grant to Runnymede borough council in my constituency has gone up by 0.4 per cent. How does he expect Runnymede borough council and other councils in a similar position to maintain high-quality public services and keep council tax low under such a grossly unfair grant distribution system?

Tony Blair: It is not unfair. For example, if we take education, there has been an increase in funding of 26 per cent., or an extra £760 per pupil. Even on the figures that the hon. Gentleman cites, there has been an increase in the funding given to his local authority. I might point out that when the Government whom he supported were in office, they cut the funds available for local authorities. I agree that we can always do more, but we certainly bear comparison with his party.

Anne Picking: Is my right hon. Friend aware that for the first time ever in the United Kingdom, women have smashed through the glass ceiling and are earning more than men in one area, which happens to be my constituency of East Lothian? However, does he agree that there is still a long way to go? Will he consider introducing compulsory pay audits to ensure, especially in the private sector, that women receive the same rate of pay as men for doing the same job?

Tony Blair: First, let me congratulate the women in my hon. Friend's constituency. She is right that nationally the gender pay gap is at an all-time low, but it is still about 14 or 15 per cent. We established the Women and Work Commission to bring together the people who can help to advise us on how to close that pay gap. I am sure that my hon. Friend is aware that the minimum wage and the working families tax credit have benefited many women on medium and low incomes, so it is important that we keep those things going. I hope that we can act on the recommendations of the commission after it reports.

Desmond Swayne: Should not potentially dangerous terrorists be imprisoned on the orders of a judge, rather than being in their living rooms and wearing a tag on the order of the Secretary of State for the Home Department?

Tony Blair: I have answered that question. The simple answer is that there is a judicial process in the existing legislation that would be used in any future legislation. The question that I put back to the hon. Gentleman is that if the security services tell us that they have reasonable grounds—that is later checked by a judge—for suspecting that people are involved in plotting terrorist acts in this country, should we allow them to remain at large? Yes, we can put surveillance on them, but that cannot always be guaranteed to work. I pointed out that we have literally had to arrest a large number of people since September 11 for terrorist offences. We know from September 11, Madrid and Bali that these people are prepared to kill without limit. That is the dilemma and, with respect, it will not be solved by questions posed in a somewhat glib way.

Vera Baird: In the Tees valley, largely thanks to the new deal, unemployment is right down to less than 4 per cent., but there are still low-skilled people who could achieve more. Will my right hon. Friend congratulate more than 100 employers who have already signed up to our wonderful support for skills programme so that their employees in the workplace, free of charge, can learn basic skills? Can this training programme continue so that the people of Redcar, who were long neglected by the Tories, can achieve the tools to get a better life?

Tony Blair: I certainly congratulate the employers in my hon. and learned Friend's constituency. I think that the overall number of apprenticeships has trebled over the past few years, so we must keep that going along with skills support and the new deal for the unemployed. We must ensure that the Jobcentre Plus programme, which is helping many people off benefit and into work, is not cut savagely. The Conservative party's programme, which we will obviously not endorse, would lead to massive cuts in the very front-line services that help to get unemployed people off benefit and into work. [Interruption.] The right hon. Member for Bromley and Chislehurst (Mr. Forth) might yawn about that, but people who are unemployed need that help to get back into work.

Alan Beith: Does the Prime Minister recognise how great is the anger of miners at Ellington colliery in my constituency at the sudden decision by UK Coal to close the pit just when the men were getting on top of its flooding problem? Is he prepared to discuss whether there can be Government involvement in helping to save the pit, particularly in view of the amount of public money that has already been invested in it and the very severe blow that it will be to the economy of Northumberland if the closure goes ahead?

Tony Blair: I entirely understand the problem to which the right hon. Gentleman draws attention, and I will be happy to talk to him about it. When he says "Government involvement", though, I suspect that that is a euphemism for Government money. We obviously have to be careful about additional sums of money that we commit. However, I am perfectly happy, in the interests of his constituency and the people who work at Ellington colliery, to meet him to talk about it, although I cannot give him any specific guarantees that we will be able to help.

Ian Davidson: Is the Prime Minister aware that we may be approaching a general election? [Interruption.] I say that because I read it in the papers. Is he further aware that many voters are wondering whether to vote Labour next time? Does he agree that voters should reward all of us on the Labour Benches for all the good work that we have done by retaining a Labour Government, and then turn and punish the Government for any mistakes, errors or misjudgments they have made by voting no in the European referendum?

Tony Blair: Well, if it were true that we were approaching a general election, may I respectfully suggest to my hon. Friend that it might be a good idea to support the Government policy of support for a positive role in Europe rather than the Conservative policy of Euroscepticism? However, he is absolutely right about the work that is being done in constituencies such as his to deliver lower unemployment, higher employment and investment in public services, and the work that we can carry on doing in making those investments in public services, as opposed to the savage cuts in services proposed by the Conservatives. Perhaps at least on that point we can both agree.

DWP (Five-year Strategy)

Alan Johnson: With permission, Mr. Speaker, I should like to make a statement on the Government's five-year strategy, "Opportunity and security throughout life."
	Since 1997, the Government have begun to transform the welfare state from a passive one-size-fits-all system to an active service that tailors help to the individual, enabling people to acquire the skills and confidence to move from welfare to work. When the Conservatives were in power, boom and bust twice led to unemployment reaching 3 million, and the numbers on incapacity benefit trebled to 2.6 million. By 1997, one in five families had no one in work and one in three children were growing up in poverty.
	There are now more people in jobs than ever before. Unemployment is at its lowest for 30 years, with long-term youth unemployment 90 per cent. lower than in 1997. With almost three-quarters of the working age population in work, our employment rate is the highest of any of the G8 countries. By supporting people in work and providing financial security for those who cannot work, we have lifted 2.1 million children and 1.8 million pensioners out of absolute poverty since 1997.
	But we can and will go further. Today's strategy sets our course for the next five years. It is a difficult course that will take us beyond concern for the unemployed to help those who are even further away from the labour market and who have more complex and substantial barriers to overcome. Its goal is genuine inclusion—stamping out the discrimination and disadvantage that prevents people from fulfilling their true potential.
	The backdrop to the strategy is a healthier society where people are living longer. Two years from now, the number of people over state pension age will overtake the number of children. In just over 30 years, the proportion of the population aged 65 and over will increase by 50 per cent., while the number of pensioners aged 80 and over will double.
	If we are to meet the challenges of our ageing society, we cannot afford to squander the skills and contributions of those who can and want to work but remain outside the labour market. Our strategy establishes a long-term aspiration of moving towards an employment rate equivalent to 80 per cent. of the working age population. That could involve supporting as many as 1 million people on incapacity benefit into work, as well as an extra 300,000 lone parents. We also envisage 1 million more older workers in the labour force, including many who will choose to work beyond the traditional retirement age.
	As I have said—it bears repeating—between 1979 and 1997 the numbers on incapacity benefit trebled. Had that trend continued, there would now be 4 million on incapacity benefit instead of 2.7 million. New claims are down by almost one third since 1997 and we have even experienced the first small fall in the total numbers. People who claimed incapacity benefit have too often been told that they should not expect to work again. Yet we know that perhaps a million claimants say that they would like to work if they were given sufficient help and support. We also know that nine out of 10 people coming on to incapacity benefit expect to get back to work quickly.
	There is growing medical evidence that for many conditions, such as back pain and depression, working is much healthier than being inactive, so failing to help those on incapacity benefit is bad not only for the economy, but for the people on incapacity benefit.
	We already know that active intervention works. We have invested in Jobcentre Plus and the new deal to give people employment support regardless of the benefit they happen to be on. The Government's pathways to work pilots build on that platform and have achieved startling success, with six times as many people getting back to work help and twice as many people recorded as entering jobs, compared with the rest of the country.
	The intervention is succeeding partly because it focuses on what people can do rather than on what they cannot. Although involvement is mandatory only for new claimants, more than 10 per cent. of those who take part are existing claimants who asked whether they could participate.
	As my right hon. Friend the Chancellor announced in his pre-Budget report, the pathways pilots will soon be extended to cover one third of the country. Alongside the extension of pathways, today's strategy sets out the wider changes that are needed. Employers, health professionals and the Government must all work together more effectively to get people into work and help them stay there.
	Employers must create healthier workplaces and play a bigger role in the rehabilitation of their employees. The Health and Safety Executive will trial and develop "Workplace Health Direct", which will provide support for occupational health in small and medium-sized firms. General practitioners and other health professionals must reinforce the message that work is a route back to health.
	Against the background of the wider change, and when we have the extra support of pathways in place, we will implement a radically reformed incapacity benefit so that, like pathways, it focuses on what people can do rather than on what they cannot.
	The main purpose of incapacity benefit is to support those who, through no fault of their own, are restricted in their ability to work because of a health condition, disability or injury. Financial security will always be essential. Society has a responsibility to provide financial support to people who are denied the opportunity to work because of health problems—and to do so for as long as necessary. That is why our reforms are not about cutting or time-limiting benefit.
	However, the current incapacity benefit system is anomalous. Incapacity benefit classifies those receiving it as incapable of working, even before they have a formal medical examination. When they have the examination—the personal capability assessment—those who are entitled get no appraisal of their likely future ability to return to work. Furthermore, no distinction is made between terminal cancer and back pain. There are few incentives in the system to encourage those with more manageable conditions to consider their potential for work. Indeed, the benefit increases with time, thus creating an incentive to stay on it for longer.
	Our five-year strategy sets out a better model for new claimants of the benefit. It represents the biggest change in benefit for sick and disabled people since Beveridge.
	Our reforms will offer more support and help than is currently available for those with the most severe health problems and impairments, while ensuring that there are clear rewards for moving into work, and that the financial risks of trying out a job are minimised. In future, there will be an initial holding benefit—at jobseeker's allowance rate—payable until the personal capability assessment has been completed, which should be within 12 weeks.
	This assessment will become the gateway to the new benefits, accompanied by an employment and support assessment which will provide a fuller evaluation of potential work capacity. The assessment will lead to one of two allowances. The majority will receive a rehabilitation support allowance, which will require claimants to engage in work-focused interviews, in return for which they will receive a conditional extra payment. At the interview, claimants will agree an action plan, and fulfilment of the plan will lead to a further conditional payment.
	Recipients who co-operate fully will get more than the current long-term rate of incapacity benefit, but any who completely decline to engage will receive only the holding benefit minimum. Those with the most severe health conditions or disabilities will receive a disability and sickness allowance. Far from having their benefits cut, those recipients would get more money because they are at most risk of persistent poverty. But we are not writing anyone off, so their engagement in some work-focused interviews would be encouraged, in line with the pathways to work programme.
	Our message is clear. There will be a basic benefit below which no one should fall; a speedy medical assessment linked with an employment and support assessment; increased financial security for the most chronically sick; more money than now for those who take up the extra help on offer; and less money for those who decline to co-operate.
	As with the pathways programme, we will develop these reforms in partnership with all our stakeholders, including those on the benefit itself. The reforms will need to be shaped on the basis of the evidence of what   works, with piloting playing an important role. The timetable for implementation will depend on the continued lessons learned from pathways, on the available resources, and on the timing of any necessary legislation. However, our goal is to have the main elements of the new system in place by 2008.
	These reforms are, of course, only part of the much wider programme at the heart of our strategy for opportunity and security throughout life. Our approach must continue to provide tailored help and support at every stage of life, to offer real opportunity for those who can and want to work while ensuring financial security for those who cannot. We will continue to support families and children to ensure that every child has the best start in life and parents have more choice about how to balance work and family life. We will support parents in their parenting role by extending rights to paid maternity leave and enabling families to have access to affordable, flexible and high-quality child care. Our new deal for lone parents has already helped nearly 300,000 lone parents into work and taken the lone parent employment rate over the 50 per cent. rubicon for the first time ever. In fact, today I can announce that we have hit a new lone parent employment rate of 55.8 per cent.—a 10 per cent. increase since 1997.
	Today's strategy sets out our intention to go further and to pilot a pathways to work model for lone parents—a more progressive model of active engagement and persuasion for all lone parents on benefit, based on clearer guarantees of advice and support. In line with our overall approach to rights and responsibilities, it will guarantee a clear financial gain from work, guarantee child care support, and guarantee the ongoing help of trained professional advisers—all in return for a responsibility to engage more intensively with our employment advisers. For those with children aged 11 or over, we will pilot the automatic payment of an activity premium, on top of all existing benefits, conditional on taking up agreed activity to help lone parents move into work.
	Giving people the choice and opportunity to work for longer will also be crucial. That is not about raising the state pension age, but about helping people to work up to that age and offering better rewards for those who choose to work beyond it. Improved arrangements for state pension deferral will mean that a typical person who delays taking their state pension for five years could receive a lump sum payment of between £20,000 and £30,000, or an increase of 50 per cent. in their weekly pension for the rest of their life.
	Working for longer, together with the increased confidence in saving that will result from the pension protection fund and other measures, will play an important part in helping people to save to meet their retirement aspirations. Guided by the work of the Pensions Commission, however, we will meet the long-term pensions challenges of our ageing society. We will set out the principles on which we will base our pension reforms separately in the near future.
	In delivering this five-year strategy, my Department will continue to modernise its service delivery, reducing overheads, streamlining processes and delivering a more efficient organisation. Over the next five years, the Government will build on our employment record to open opportunity for those beyond the traditional definition of unemployment, and to move towards a ground-breaking aspiration of an 80 per cent. employment rate. We will build on the lessons learned from our successful pathways to work pilots to reform incapacity benefit and, with the support of employers and the medical profession, help and support incapacity benefit recipients who want to work to do so.
	We will build on our progress in fighting discrimination, moving to a world in which opportunity and security are not dependent on age, disability or ethnic background. And we will build on our progress in tackling poverty, halving child poverty by 2010, continuing to lift pensioner income and helping another 300,000 lone parents into work.
	With this strategy, we will build for the future—a future with opportunity and security throughout life. I commend this statement to the House.

David Willetts: I welcome the fact that the Secretary of State has come to the House to make a statement on his plans. After all the briefing and spin of the past few days, it is right that he should come here to clear things up, and we appreciate that.
	We also agree with the Secretary of State that more must be done to help disabled people into work. Of course, we also have an obligation to provide decent support for people who are seriously disabled and cannot be expected to work. We believe that it is possible to save money on the cost of disability benefits, but that should be done by helping those who can work to do so. It would be wrong to cut benefits for people who are genuinely sick or disabled. I believe that those principles are shared on both sides of the House.
	After eight years, however, the Government must expect to be judged not on their words but on their record. The Secretary of State talked today about tackling economic inactivity—but can he confirm that the number of economically inactive people has risen by 300,000 since Labour came into office, and that that accounts for nearly half the fall in unemployment over the same period? The Secretary of State says that the problem is people who have moved from unemployment on to incapacity benefits instead—but will he confirm that back in 1997 47 per cent. of people moving on to incapacity benefit were unemployed, and that that figure is now up to 60 per cent?
	The Secretary of State said that the number of people moving on to incapacity benefits was down. Will he confirm, however, that the number of people leaving incapacity benefits is also down, and that the total number of people claiming the benefits is now 140,000 higher than it was in May 1997?
	Therefore, everyone in the House agrees that there is a problem. We agree with the Prime Minister when he says,
	"we can also reform incapacity benefit so that it returns to what it was meant to be: a benefit which compensates those who've had to give up work because of long-term illness or sickness. That's not what it is now. It's an alternative to long-term unemployment or early retirement."
	The trouble is, that is what the Prime Minister said in May 1999.
	Anyone who has followed this Government's endless reannouncements cannot help but think of that Bill Murray film "Groundhog Day". May I congratulate the Secretary of State on his brilliant timing? In America there really is a Groundhog day—and it is today. We are celebrating Groundhog day today in the House of Commons, and what better way for the Government to mark it than by making the same promises on welfare reform that they have made again and again and again? We have heard it all before.
	When I read the document that the Government published today, it had a strange familiarity. Perhaps I may quote:
	"Our priority is to forge an entirely new culture which puts work first and is based on a modern, integrated, flexible service for all. This means a fundamental shift in the way we support people—away from merely asking 'What money can we pay you?' to 'How can we help you to become more independent?' . . . we aim to implement new legislation to make it a condition of receiving benefit that, when asked to do so, people take part in an interview to talk about their prospects of finding work. For people with a long-term illness or disability claiming incapacity benefits, as for others who are claiming benefits, attendance at such an interview will be an integral part of their claim."
	But that is from a document called "A new contract for welfare: support for disabled people", produced in October 1998. Can the Secretary of State tell the House whether he has read it, and can he tell us in what respect what he is saying today is any advance on what we were told six and a half years ago?
	We know what the Secretary of State has been up to. He has been told by No. 10 to come up with some eye-catching initiative on incapacity benefits. He is an ambitious man, so of course he agrees. He goes back to the Department and says to his permanent secretary, "We've got to do something about incapacity benefits; what on earth should we do?" The permanent secretary says "Here's something I prepared earlier—six and a half years earlier." And the Secretary of State has brought it back to the House today.
	Why is it that these promises of incapacity benefit reform never materialise, and why should anyone believe what the Secretary of State says today when we have heard it so often from his predecessors? It is because Ministers do not learn from their mistakes that they are condemned to repeat them. When the Government means-tested new claims for incapacity benefit, we warned that people already on the benefit would be deterred from leaving it because they would fear that they might have to go on to the new means-tested benefit at a lower rate. Our warnings have been proved correct. That is why the number of people on incapacity benefit has gone up since the Government announced their last so-called reforms. What steps will the Secretary of State take to counteract that perverse effect when he has another new regime for new claims? Does he recognise that it is possible that today's announcement could make the problem worse?
	Incidentally, will the Secretary of State confirm that the measures that he has announced today apply only to new claimants, and will have no effect on the 2.7 million people who are already claiming the benefit? Why has he not announced any measures to help those already on it? Does he recognise that the fundamental difference between his approach and ours is that we want to help existing claimants? All he is talking about today is a policy that might possibly apply to new claims in 2008. That is no help at all for people who are stuck on the benefit today.
	Yesterday, the Prime Minister said:
	"We want to reform the benefit rules which pay claimants more the longer they actually stay on benefit and, in fact, at the moment these rules penalise those who want to manage their condition and eventually return to work. So we've got to take that, if you like, perverse incentive out of the system."
	Today, the Secretary of State said he was not cutting benefits. Yesterday, the Prime Minister talks tough and says that the Government are going to get rid of the long-term rate, and today, the Secretary of State says that they are not going to cut benefits at all. The Prime Minister marches people up to the top of the hill, and the Secretary of State comes to the House and marches them down again. The device that is being used to reconcile those apparently irreconcilable statements is that people will receive the new benefit only if they agree to turn up for a work-focused interview.
	Will the Secretary of State tell us a little more about the conditions for receipt of the benefit? How will he police the boundary between the two new benefits that he has announced? How many new claimants will be entitled to receive the new higher rate? How many claimants does the Secretary of State think will refuse to turn up for the work-focused interviews and settle for the lower rate? How many people does he think will lose benefits for failing to attend? How many people does he think he will get into work as a result of these policies?
	Will the Secretary of State recognise that the new work-focused interviews may be no more successful than any of the existing work-focused interviews that the Government have been launching for the past few years? Does he read his Department's own appraisals of their success?

Mr. Speaker: Order. I find what the hon. Gentleman is saying very interesting, but he is making a speech. He should be putting questions, with no embellishment whatsoever. I also note that he has been on his feet for about 10 minutes, and I am expecting to give Back Benchers an opportunity to ask questions.

David Willetts: There are a good many questions to ask about this policy, Mr. Speaker, but the Secretary of State does need an opportunity to answer the questions that I have already put.
	Conservative Members are not sure whether, after eight years in office, the Government have really learned the lessons of their failure to reform welfare in the past. We want to know why we should believe anything that the Secretary of State says today after his failure so far to deliver any of the promises on incapacity benefit that we have heard from him.

Alan Johnson: Where can I begin, Mr. Speaker? I certainly give the hon. Member for Havant (Mr. Willetts) 10 out of 10 for sheer effrontery. He asks what has been happening since 1997. The entire Conservative party should be sitting here—[Hon. Members: "Where are they?"] Probably at lunch—but if they were sitting here they should be wearing sackcloth and ashes; in fact, they would probably look better like that than they do in their normal suits.
	The issues that we are discussing today are about lifting pensioners out of poverty. Who put pensioners into poverty? The Conservative party. The hon. Gentleman talks of giving help to disabled people. The Conservative party denied civil rights to disabled people throughout its 18 years in office.
	Let me give another statistic. The hon. Gentleman asks what has happened since 1997. Not only have we crossed the 50 per cent. line in terms of the number of lone parents in employment, but more than 50 per cent. of disabled people are now in employment. That is an extremely important bridge to cross, given the perception of disabled people as being somehow incapable of work.
	I remind the hon. Gentleman that 700,000 people were claiming incapacity benefit in 1979, and 2.6 million were doing so by the time the Conservatives left office. These, incidentally, were not people with medical conditions that could not be rectified; they were people who had left steel mills, shipyards and coal mines, been directed towards incapacity benefit and told to go away and be passive recipients of benefits for the rest of their lives.
	What has happened since 1997? The hon. Gentleman asked about people who had been on incapacity benefit for 20 years. We have reduced the flow on to incapacity benefit by a third. None of these people are freeloading, by the way; this is not the 1980s. These are people with genuine health conditions who undergo a personal capability assessment to receive incapacity benefit. The number of new claimants has been reduced by a third. We have developed pathways to work, which I would describe as the most extraordinary development in the history of this issue. We built on Jobcentre Plus—which has had to be created over the last seven years—and the merger of the Benefits Agency and the Employment Service, which gave us a foundation for pathways to work.
	If the hon. Gentleman wants to find out what we have been doing, and why ours is the right approach, he should visit a pathways to work area. He knows a thing or two about the issues—and to be fair, he is probably more to the left on them than the rest of his party. [Interruption.] I withdraw that remark immediately; but the hon. Gentleman should still visit a pathways to work area. He will be inspired, just as our staff at the front line are, by the stories that we hear there and by the help that can be given to get people back into work.
	The hon. Gentleman asks what we will do to help people to try out work. They will not face never being able to get back on to benefit. That is crucial for people on existing benefits—"on the stock", as they are not very charmingly described. As we say in the five-year plan, we need to change the linking rules even further. The Chancellor of the Exchequer said in the pre-Budget report that we would relax those rules. We have introduced a greater permitted work regime to assist people in that position, but that is not all we can do for people on the stock. I confirm that these arrangements apply to new claimants of IB.
	As I said in my statement, in pathways to work areas, we are already seeing people who have been on IB for many years wanting to become involved. This month, we will extend the pathways to work project to people who have been on IB for three years. We will offer the opportunity for anyone to become involved, but it would be wrong to pretend that it will be easy dealing with people who have been on IB for 15 or 20 years, because they get into a mindset. The important part of our proposals is to have a speedy process: a personal capability assessment within 12 weeks; and assistance and advice early on, so that people can be given the assistance that they need, without being, as they were previously, sent away to be passive recipients of benefits for the rest of their lives.
	The plan needs to be seen in the context of what has gone on before: the development of Jobcentre Plus and pathways to work, which enables us to move even further in a climate where we have the lowest unemployment for 30 years and the highest employment of any major industrialised nation.

Steve Webb: This is the five-year plan of the Department for Work and Pensions. Can the Secretary of State tell us what happened to "and Pensions" today? After seven years in office, all the Government have promised is a statement of principles in a couple of weeks that will underlie pension reform. What can Britain's pensioners expect by way of action? Have not women pensioners suffered injustice for long enough? In a five-year plan from the Department, will they not have expected something that amounted to action, not just a statement of principles? Can the Secretary of State update the House on how far he has got with persuading the Chancellor to adopt the Liberal Democrat policy of a citizen's pension? I welcome his openness on that front—how is he getting on with his mates?
	On incapacity benefit, can the Secretary of State confirm that his central thesis—I quote from his statement—is that "benefit increases with time, creating an incentive to stay on it for longer"? Can he confirm his remark in the press—or was he misquoted this morning—that £75 a week of incapacity benefit was "comfortable"? That is the word that he used. Is it his thesis that people are comfortable on incapacity benefit of £75 a week and choose not to seek work? Where is the evidence for that basis of his reform? Can he confirm that incapacity benefit is high where joblessness is high and that, for many people on IB, there are not jobs for them to go for? Is there a danger that, under his incentive structure, a lot of those people will be forced to go through the motions of applying for jobs when there are not jobs there to take?
	Can the Secretary of State confirm that, out of the 2.7 million on incapacity benefit, nearly 1 million get no money? Can he confirm that that is a fast-growing group and that real spending on incapacity benefit has fallen by £2 billion since 1997? What will he do for that group? As people in that group are not entitled to any cash from incapacity benefit, how does changing the rates of incapacity benefit affect their incentives? How will that group, which is the only fast-growing group of incapacity benefit recipients, benefit from his reforms unless he changes income support, too? Can he tell us, therefore, whether income support for disabled people will also be changed in the way he has described?
	Seven years ago, it was said that 1 million disabled people wanted to work. Today, the Secretary of State used the same figure again, which is testimony to the failure of these repeated announcements to deliver. Is not incapacity benefit itself a barrier, because it is very much an all-or-nothing benefit? Is not it true that disability is much more shades of grey? Many disabled people can do some work, and the conditions of many fluctuate. Is not the system still far too rigid? Should not there be a partial capacity benefit to go with the grain of what people can do, instead of it being yes or no, black or white?
	Britain's pensioners will be disappointed by the statement. We have yet to see evidence that people on incapacity benefit will get the support that they need to improve their life.

Alan Johnson: First, on pensions, as I made clear earlier, and it is in the five-year plan, we will publish a statement on our pension principles. The hon. Gentleman asks what we have done for pensioners. He should look at the Pensions Act 2004 and consider the fact that pensions credit has lifted 1.8 million pensioners out of abject poverty. A recent report by the Institute for Fiscal Studies, with which he has an intimate relationship, showed that, for the first time in history, pensioners are no more likely to be in poverty than any other group in society. That is significant. Age has always meant the workhouse—in Charles Booth's day in the early 20th century, it was linked to poverty. The measures that we have taken to deal with abject poverty are turning that situation around.
	The Pensions Commission made the point that the last thing we want is for politicians to have a knee-jerk reaction to a problem that is 20 to 25 years down the road. Its advice is sound. There is no instant solution to that problem. We are keen to achieve a political as well as national consensus about where we should be in 2050, so that we can ensure that whatever we implement is consistent and remains in place.
	I do not know where the statement about £75 came from. The hon. Gentleman keeps coming up with statements—

Maria Eagle: He makes them up.

Alan Johnson: My hon. Friend says from a sedentary position that the hon. Gentleman makes them up. I have never said that someone on £75 a week is comfortable—quite the opposite. Indeed, we are saying that those with chronic sicknesses, who will probably never be able to work again, require more support, as do people who can, with rehabilitation, get back to work, provided that they co-operate with the arrangements that we are putting in place. Therefore, I do not believe that anyone on £75 a week is comfortable.
	As for where the jobs will come from, we now have not just the lowest unemployment for 30 years, the highest employment in the G8, the lowest redundancies since records began, 55 per cent. of lone parents in work, and more than 50 per cent. of disabled people in work, but 600,000 vacancies. We have a good, strong economy. The hon. Gentleman can come with the hon. Member for Havant (Mr. Willetts) to a pathways to work area to talk to people in Gateshead, south Wales and in difficult areas. It is not lack of jobs that is the problem; the problem is helping people to overcome the barriers to get back into work.
	I know that it is difficult for the Liberal Democrats, who are kind of a trumped up think-tank. When it comes to implementing policies, it would be nice for them to say either what their policy is or what the problem with our policy is. We got a little hint of it in relation to the "shades of grey". We agree—we are pleased that the Lib Dems are adopting our policy—that there are shades of grey. The one-size-fits-all solution, the single benefit, no matter what the sickness is, with no flexibility for people to work without fear of losing their benefit, and the things that we have done on earnings, drive this reform. I look forward to the Liberal Democrats joining us in heralding it as the breakthrough that it is.

Frank Field: May I draw attention to the confidence of Labour Members and the country in the skills of my right hon. Friend in tackling welfare reform? I urge him, however, to be slightly more radical than he has suggested he will be today. Does not the fact that we now have a record low level of unemployment offer the opportunity to abolish benefit for the unemployed and for those on incapacity benefit, to have a single benefit for those of working age who are not in work and to assume that everyone, from the moment that they sign on, will, when they can, seek work, with all our efforts being tailored to get them to achieve that objective?
	My worry about the scheme is that we as politicians are not very good at deciding who is capable of work and who is incapable. In my opinion, some of the people in Birkenhead who cannot get incapacity benefit ought to be getting it. Others are rightly claiming and getting it, but there are many other claimants who ought not to be getting it, but who spend all their energy on ensuring that they remain on it. How will my right hon. Friend's reforms address that issue? Does not the low level of—

Mr. Speaker: Order. The right hon. Gentleman knows that I have given him more than one supplementary.

Alan Johnson: I accept that, at a time of low unemployment, we can be bold and radical. I believe that the proposals are bold and radical, but obviously there is still a process to go through. It is a five-year strategy and, as I said in my statement, we need to talk to everyone with an interest in this issue about how we firm up these proposals.
	I am not immediately attracted to the argument in favour of a single benefit. As I said to the hon. Member for Northavon (Mr. Webb), a one-size-fits-all solution is difficult to achieve, but my right hon. Friend is right to argue, as he has consistently done, for benefit simplification. Such simplification presents us with a big challenge. The various benefits in the system have been layered one on top of the other, and there is a real case for radical transformation and simplification. In doing so, it might be possible to provide some of the improvements that my right hon. Friend wants.
	My right hon. Friend mentioned people on incapacity benefit in his constituency, which is an issue in many constituencies, particularly in the north. I have not given up on those people and I am not going to worry them by saying that a draconian measure will be introduced. In fact, the new measure, which applies to new benefit claimants, is not draconian. I want to help get those people back into work. Pathways to work is in its very early stages and we have yet to deal with the stocks; indeed, we have only reached those who have been on incapacity benefit for 12 months. We are discovering that there are real lessons to be learned about how to reach those people. A combination of reducing the inflow and reducing the number on the stocks—for the first time in years, the stocks are down by the albeit small figure of 9,000—is the way to ensure that, regardless of the economic situation, those people's lives are enhanced and transformed.

Archy Kirkwood: Does the Secretary of State accept that everything that I have learned about benefit reform in the past 20 years leads me to conclude that the most important thing to do in the next five years is to make a serious effort to simplify the system? The introduction of tax credits and the pension credit has improved poverty levels, but it has also increased complexity. Will he undertake to give due emphasis to such simplification during this five-year programme, and in view of the widespread interest in incapacity benefit proposals, may I make a bid, from the departmental Select Committee point of view, for draft clauses to be published and pre-legislative scrutiny to be allowed in the next Parliament?

Alan Johnson: The answer to the first question is yes and the answer to the second is probably. Such matters have to go through the usual channels, but I certainly see the benefit of publishing draft clauses and of ensuring that this necessary legislation—we cannot implement the proposals without it—can be scrutinised in full before we publish it. With that caveat, I am happy to give the hon. Gentleman the assurance that he seeks.

Roger Berry: The detail of the Government's proposals will obviously have to be carefully considered, but I warmly welcome the provision of additional help in getting back into work those people who can work, not least because, as we have noted, incapacity benefit is not a generous benefit. Indeed, those on it are living on the margins of poverty. Can my right hon. Friend assure me that the benefit system will have the capacity to distinguish between those more able to work and the less able, and that personal advisers—a crucial component of this very welcome package—will have the skills, expertise and sensitivity to ensure that such people's needs are met properly?

Alan Johnson: I welcome my hon. Friend's comments. He has far greater experience of dealing with these issues than I have, and I can only learn from it. On the capacity to distinguish between the more able to work and the less able, 20 per cent. of people who go through the system are already classified as personal capability assessment-exempt. They are so chronically sick that it is considered perverse even to ask them to go through the PCA, and they are an obvious 20 per cent. who flow into the second category, to which very little conditionality is applied. The medical profession carries out the PCA, and I certainly do not want to hand over such assessment to civil servants or anyone else.
	We are extending the capacity of individuals working in Jobcentre Plus all the time. On meeting a personal adviser working outside a pathways area, one would conclude that they have an enormous amount of expertise, as indeed they have, but those who work in pathways areas receive extra training. Not only are staff motivated and enthused by such training, it transforms the service that the customer receives. So I can reassure my hon. Friend that we will ensure that personal advisers have the necessary skills and sensitivity to carry out their important role.

Michael Fabricant: The Secretary of State will know that there have been conflicting messages in the past few days. For the sake of clarity, can he point to anything in his statement that will benefit existing claimants of incapacity benefit, not new ones, or to anything that will be detrimental to them—or is there no change?

Alan Johnson: Let me be absolutely clear: this is about new incapacity benefit claimants. I may be wrong, but I doubt whether any such change has ever been applied to those who are already in the system. Because the new system is predicated on pathways to work, it provides help and support for people who are already on incapacity benefit. It enables them to participate in work-focused interviews, make use of the assistance provided, take advantage of the £40 a week in-work credit if they are taking up a job that pays less than £15,000 a year, and take advantage of the condition management that health professionals provide as part of the service. I am absolutely sure that people in the hon. Gentleman's constituency, and in mine, who have been on IB for some time will want to participate voluntarily in the new system.

Anne Begg: As politicians, we can say today that this is the right way forward and that it is very important that people who have been out of the workplace because of disability or illness should get back into work. The real test, however, will be the experience of the people themselves, and it is word of mouth that will sell the Secretary of State's proposal. Some of the people to whom I speak who fall into this category still fear that they will be somehow worse off, or that coming off incapacity benefit and taking up work is too risky. They do not realise that the linking rules and the permitted work rules have changed. What can the Secretary of State do to allay those fears, so that everybody presently on incapacity benefit, severe disablement allowance or any other disability allowance will know that if they take that first step across a jobcentre threshold, they will have nothing to fear and everything to gain?

Alan Johnson: My hon. Friend raises an important point. Many of even those who are considered the most chronically sick want to work. As she well knows, severe disability does not prevent people from working and it should not prevent them from being helped to find work, which is why we need to get such people to attend a work-focused interview. For the most chronically ill, the only condition that applies in pathways to work areas is that they should attend such an interview occasionally. That allows us to explain to them the rules on linking and allowed earnings, and the various other parts of the package, which makes it clear that they can put their toe in the water. If they are worried about taking that step, they can see how they get on without losing their right to benefit. The work-focused interview with a highly trained and professional personal assistant is a crucial part of this system, whatever level of benefit the person in question is on.

Michael Weir: It is strange that the only reference to pensions in a five-year strategy plan is the rather wimpish statement that the Government will set out the principles on which pension reforms will be based. Is that happening because the Chancellor is fighting a last-ditch attempt to save the rather discredited means-tested pension, rather than moving towards a citizen's pension? If so, what does the Secretary of State intend to do about it?

Alan Johnson: Let me be absolutely clear. When the hon. Gentleman has had a chance to read the five-year strategy, he will see that we have lifted 1.8 million pensioners out of poverty. It also makes it clear that whereas earnings have increased by 12 per cent. net, pensioners' incomes have increased by 19 per cent. net, and that the introduction of the pension protection scheme—one of the most radical changes ever taken to protect occupational pensions and to deal with auto enrolment—has helped to transform the pensions scene. I accept that we have not said much about pensions today, but that is because we are concentrating on one specific issue. I can assure the hon. Gentleman that he will hear lots about pensions—not just in the coming weeks up to what may well be a general election, but beyond.

Terry Rooney: May I congratulate my right hon. Friend on his statement and on his openness to receiving ideas and advice over the past few months? I particularly congratulate him on his comments about occupational health in the workplace and his linking of that issue with the public health White Paper. What prospects can we offer people whom so many employers abandon for the 28 weeks during which they are on statutory sick pay? More specifically, what role does he see for the excellent voluntary sector occupational health projects up and down the country?

Alan Johnson: I thank my hon. Friend for his comments and for his input as chairman of the Back-Bench parliamentary Labour party Department for Work and Pensions group. First, let me tell him that we can offer people assistance in the workplace. A third of those on incapacity benefit come directly from the workplace when their statutory sick pay runs out after 28 weeks. Suddenly, they are on something called incapacity benefit. We then put a good deal of time and effort into trying to get them back into the job that they occupied in the first place.
	There is a lot to be done, and today's announcement that the Health and Safety Commission will be allotted £26 million to expand its work on occupational health issues will help employers better to manage the problem. Employers should not just stack up the days lost through sickness absence, but actively engage with individuals to find out what is wrong and help them back to work. It is also important to create a healthier workplace, which might prevent employees from becoming sick in the first place. Once my hon. Friend has had time to read the five-year strategy, he will see that we are also looking further into statutory sick pay to establish whether a change could support the overall aim of helping more people to either stay in work or return to it.

Andrew Selous: The Secretary of State talks about better rewarding those who choose to work beyond state pension age, but he is not giving them the right to do so. I know from my own experience of a 65-year-old widow, a highly competent school secretary, who was forced out of her job solely because of her age. Does the Secretary of State defend that? Does he not feel strongly about age discrimination? Should not the only criterion for keeping a job be a person's competence in it?

Alan Johnson: Actually, I have a great deal of sympathy with the hon. Gentleman's point, but—[Interruption.] Yes, I can see the hon. Gentleman's letter. I can understand why the constituent would feel that she was being discriminated against on account of her age. Where do we go from the current climate in which most people are out of the workplace by the time they reach 62 rather than 65? We would greatly like to see a position in which companies have no fall-back position on pension age and people can work to whatever age as long as they are fit and efficient at doing their jobs. I do not think that we are quite in a position to be able to implement that right now, but I am also unsure about official Opposition policy on that.
	With the introduction of age discrimination legislation in 2006—I do not want to upset Conservative Members too much, but it derives from a European Union directive, so it could be uncomfortable for them—we take the view that it is still too soon to have no default retirement age at all. That is why we have said that no one can be retired below 65, which is a major change; that there is a right to request to work beyond 65; and that five years after implementation, in 2011, we will conduct a review to see whether we can lift any remaining barriers. I believe that we will eventually reach a position in which those barriers have gone, but it is important to listen to the business community, employers and others who have said that it is not possible to do it in one fell swoop.

Robert Jackson: Will my right hon. Friend say something about training arrangements to help people come off incapacity benefit? More particularly, what does he think about the Opposition's commitment to abolish the new deal on the ground that it is a wasteful operation?

Alan Johnson: I can tell my hon. Friend that the training aspects are, indeed, important. Pathways to work has helped twice the national average number of people back to work. It has also helped six times the national average number of people—including some who have been out of work for a long time—to get closer to the labour market through skills training. That shows how crucial it is to provide such intervention. The views of Conservative Members, who want to abolish many of the new deal programmes and privatise Jobcentre Plus, are a matter of great perplexity to me. If my hon. Friend could help me to understand them in the Labour end of the Tea Room, I would be pleased to speak to him there. However, the hon. Member for Havant (Mr. Willetts) seems fairly sympathetic. He is quoted as saying in today's newspapers that our proposals "look good". That being the case, I do not understand how abolishing the new deal and privatising Jobcentre Plus will make any improvement at all on the current position.

Paul Holmes: The first year of the pilot of pathways to work—including the one in Chesterfield and north Derbyshire, which I have visited—shows that help, support and providing incentives to work can be successful where threats and sanctions cannot. It is therefore hard to understand why the Government want to extend pathways to work only to one third of the country rather than to the whole of it. In that light, will the Secretary of State clarify what he meant in his statement when he said that, with the extra support of pathways in place, the Government would implement a radical reform to the incapacity benefit system by 2008? Does that mean that, by 2008, pathways to work and the new system will have been extended to the whole country or only to one third of it? Or does it mean that the new system will apply to the two thirds of the country that does not have the support of pathways to work? If so, it would undermine the Secretary of State's point about the success of pathways to work.

Alan Johnson: I am glad that the hon. Gentleman is a fan of pathways to work, and I shall soon visit the Derbyshire scheme. Pathways to work is essential for the reforms that we are setting out today. The Chancellor announced that the scheme will be extended to a third of the country, but the wider reforms are predicated on the operation of pathways to work across the whole country. It is a five-year plan, but we are in a three-year spending review, so we have the usual process to go through beyond 2008. We certainly hope that, by 2008, the major elements will be in place. That will include legislation to make changes so that the PCA can be accompanied by an employment ability test. Some of the linking rules will have to be changed, along with other aspects. However, 2008 will not see pathways to work extended throughout the country—only to a third—but the elements for change will be in place, ready to advance across the whole country thereafter.

Angela Eagle: May I congratulate my right hon. Friend on a very forward-looking statement? I look forward to the imminent arrival of pathways to my constituency. Does he agree that one of the greatest difficulties for people who suffer from chronic conditions—they can, of course, fluctuate—that has prevented them from aspiring to work in the past has often been the attitude of employers who fail to understand how to get the best out an individual who is managing a condition? If we are to ensure that these welcome reforms are effective, we must work hard to persuade employers to be much less narrow minded in their treatment of people with disabilities, and achieving that change might require legislation on disability rights.

Alan Johnson: I agree entirely with my hon. Friend. There is a lot of evidence of discrimination by employers, especially against people with mental illnesses. That is on top of the huge discrimination that has gone on for years against people who are physically disabled. In part, the answer lies with our disability discrimination legislation, whose passage through the House was the final fulfilment of our manifesto commitment to deal with what my predecessor called the great emancipation issue of our time.
	That is not the total answer, however. The legislation may be in place, yet the inherent and underlying prejudices continue to exist. The legislation is a crucial part of the reform, but we must also ensure that we produce a society in which people are genuinely empowered, irrespective of their disabilities. We are still quite a way off that, and there is more work to do.

Roy Beggs: I welcome the Government's action to assist people on incapacity benefit and to give them an incentive to go back to work. I also welcome their commitment to give increased benefit to people who cannot work because of chronic and serious illness. I have coped with serious back pain for short periods over the past 30 years. I have been in traction in hospital, I have worn the steel corsets and taken the painkillers. However, I have been privileged in that I have been able to pay for private treatment when I needed it. I have not had to resort to the NHS for at least 10 or 15 years.
	Will the Secretary of State discuss with his colleague the Secretary of State for Health the possibility of funding people who suffer from back pain so that theycan benefit from the manipulative skills of physiotherapists and chiropractors in the private sector, where those skills are not available on the NHS?

Mr. Deputy Speaker: Order. That was a very long question.

Alan Johnson: I listened with interest to what the hon. Gentleman said. I will talk to my right hon. Friend the Secretary of State for Health, but the hon. Gentleman should read chapter 7 of the recent "Choosing Health" White Paper. That speaks at great length about how the attitude of the health profession has changed in respect of conditions such as his.
	Condition management is a major element in helping people off incapacity benefit and back to work. It is especially crucial for people who suffer back pain, and central to it is the need to ensure that they can see NHS experts as part of a return-to-work programme that might include physiotherapy. I shall talk to my right hon. Friend the Secretary of State for Health about the wider aspects of using the private sector.

Eric Illsley: Will my right hon. Friend confirm that pathways to work has been successful because it is voluntary and based on encouraging and helping people to go back to work? Will he also confirm that those principles will be part of the new system, and that people will not be taken off benefit compulsorily simply because they fail the interview or are unable to comply in some way with the new regulations?

Alan Johnson: I can give my hon. Friend that assurance. Pathways to work has been a huge success, and will be extended to his area. It is a voluntary system: that is why it works and why the disability lobby supports it completely. The House can call me "Anne of Green Gables" if it likes, but my feeling is that people offered an opportunity to reconnect with society grab it with both hands. After all, they do not live in the lap of luxury on £4,000 per year.
	As for our proposals for future incapacity benefit recipients, more money will be available as long as those people attend the required interview and agree a work plan. That is not the same as throwing them back on to jobseeker's allowance, as the process does not depend on them finding a job. The extra payments require only that people actively work towards acquiring the necessary skills, and so on. Some people advocate a time-limiting approach, but I think that that is regressive and doomed to fail.

Adam Price: Currently, about half the total number of incapacity benefit claimants deemed by the Department to be fit for work win their appeals against the decision. Does not that suggest that Government policy has in part been about pressurising sick people back into work against their will? What confidence can the sick and disabled have that the new proposals are anything more than another cost-cutting measure?

Alan Johnson: No, I do not accept what the hon. Gentleman suggests. The fact that 50 per cent. of people who appeal win their cases is a matter of some concern to me, and the point was raised by someone on my own side yesterday evening. That needs to be looked at.
	As to whether the Government are trying to force people back to work, I remind the hon. Member for East Carmarthen and Dinefwr (Adam Price) that the PCA is a medical test. It is one of the most stringent in the world, but I do not apologise for that. In its current form, the PCA is meant to determine only whether a person should be looking for work or should receive benefit. That is what needs to change. The hon. Gentleman's claim might look good in a constituency leaflet, but there is no basis for saying that this Government have done anything but try and help disabled people. The disability lobby accepts that a combination of the Disability Discrimination Act 1995 and the assistance provided by the pathways to work measures mean that this is a different era for disabled people compared with what happened between 1979 and 1997.

Joan Humble: I warmly welcome the comprehensive package presented by my right hon. Friend this afternoon, but will he say more about how people with mental health problems will fit into the support system that he has outlined? All too often, the medical assessment procedure does not take account of people's specific mental health problems, or the fluctuating nature of the illness. How can he assure me that people with such problems will benefit from the support that he has outlined?

Alan Johnson: I accept that fluctuating conditions are a problem. The PCA system acknowledges that, and my hon. Friend's question is therefore extremely valid. It is a problem more for the medical profession than for politicians, but it is something that we need to pursue. A fair chunk of the total number of people claiming incapacity benefit suffer from some form of mental illness, but they are probably the people who would be worst served by being told to sit alone in a dark room.
	As I have said before, the suicide rate among people who have been unemployed for a long time is 30 times higher than that faced by people in employment. Being written off is not good for people with any sort of condition, but it would be very strange to tell people with depressive illnesses to go and divorce themselves from society. Our condition management approach is focused on helping people with mental illnesses, but we acknowledge the problem arising from the fluctuating nature of such illnesses. We need to resolve that.

Sandra Gidley: The subject of mental illness is one of the most important that we have dealt with today. The problems are different from day to day, as people have good days and bad days. The Minister has talked about the stick approach of legislation designed to prevent discrimination, but has he thought of adopting a carrot approach too? Such an approach would mean that employers were not disadvantaged by employing people who they knew in advance would probably have bad days on which they could not work. Does the right hon. Gentleman agree that we need to give people in that position a chance?

Alan Johnson: The hon. Lady is right, and employers and our national employment panel are already looking at this issue. The fair cities initiative deals mainly with ethnic minorities, but it is intended that it will also move on to other matters. Ensuring that people who go through the pathways to work process—and similar processes—find employment means that employers must recognise the points that she raises.
	In my statement, I said that it was crucial to have employers working alongside the Government in this matter. At their worst, these are discrimination issues: at their best, they arise from employers' lack of understanding of the problems arising from mental illness.
	Finally, I remind the House that today's labour market is very tight, with 74.8 per cent. employment. Social issues notwithstanding, it is economically important that employers are able to use the best talent in the country. That means taking on people who receive incapacity benefit and people from the ethnic minorities, where the unemployment rate is higher. The hon. Member for Romsey (Sandra Gidley) raises a valid point, and we need to pursue it.

Andrew Dismore: I warmly welcome my right hon. Friend's statement, which was balanced and badly needed. Bearing in mind how important personal advisers will be to the operation of the system, what assessment has he made of the number of personal advisers who are likely to be required and, in particular, will they be protected from the Gershon review requirements to ensure that we are able to employ the people we need to help people back to work?

Alan Johnson: They will be protected while this party is in government. That is absolutely clear. In terms of spreading out—

David Willetts: You are the party of Gershon.

Alan Johnson: Well, the Tories are the party of the James review, which would take 100,000 jobs from the Department for Work and Pensions. That was the last figure I heard, but I do not know what figures have since been invented.
	The roll-out of the pathways to work programme to one third of the country was announced, thankfully, in the pre-Budget report and the money came with it. That requires another 1,000 personal advisers. I cannot comment about 2008 because that will involve a different spending review, but the programme now requires more front-line staff and we do not need to change our plans—they are already stringent enough—under the Gershon review.

Michael Connarty: I welcome the balanced approach of my right hon. Friend the Secretary of State. He said that it is part of a framework to try to drive forward efficiency and reconstruction in the Department. The yellow brick road of pathways to work has not yet reached my constituency and the Jobcentre Plus I was promised in Bo'ness seems to be fading into the distance. Will my right hon. Friend assure me that he understands the need to have a footprint in the community? We need a sense of the Department in the community, not a service delivered from a distance, particularly to a community that is under stress because it has lost its mining and industrial base. It has a number of people on incapacity benefit who need the help that he is offering, but from a base within the community.

Alan Johnson: As my hon. Friend knows, I have met him to discuss Bo'ness. I accept his comment about a presence in the community and we are offering that in Bo'ness. My hon. Friend, for understandable reasons, believes that that presence should be a more widely advertised presence in the high street, whereas we are suggesting two outreach programmes in more deprived areas. We need to get the balance right and I promise my hon. Friend that I will continue to reflect on his representations.

Several hon. Members: rose—

Mr. Deputy Speaker: Order. I am afraid that we must move on.

Public Service Bank Holiday

Claire Ward: I beg to move,
	That leave be given to bring in a Bill to introduce a public holiday on the third Monday in October in recognition of public service and for connected purposes.
	I have two reasons for wishing to introduce this Bill today. The first is to provide a much needed additional day of rest for the British worker. This Government have done much to encourage a sustainable work and family life balance. The extension of maternity rights, better financial support for working parents and more child care have certainly helped many parents to juggle their lives more successfully, as has the right to a minimum of four weeks paid holidays a year.
	Families need more quality time, however, because the British work some of the longest hours in Europe and many families do not have as much time together as they would like. That has an impact on relationships between couples and on the influence that parents have over their children. An additional public holiday might not hold the key to all the ills of family life, but it would certainly be a further step towards giving British workers a little more time away from their workplace.
	We have eight days of public holiday in England, Scotland and Wales at present. Our Northern Ireland citizens are rather better off, benefiting from an additional two days. With the exception of the one-off public holidays granted by Her Majesty in 1999 for the millennium and in 2002 for the golden jubilee, we have little to celebrate regarding public holidays. Sadly, as the law stands, some workers cannot even be guaranteed public holidays free from work, and I hope that the Government will address that at some time in the future.
	The meanness of our current public holiday provision is highlighted by comparison with our European counterparts. France has 11 days a year, Belgium has 10, Germany and Greece have up to 12, while Portugal and Spain have up to 14. Before the enlargement of the European Union in May last year, the average for EU members was 10.8 days. Since welcoming the new members to the European Union, the average has increased to 11.35 days, boosted by the fact that Slovakia has 18 days, Cyprus has 16 and Hungary has 13. Meanwhile, Britain languishes at the bottom of the table, with eight days.
	Not only do our citizens work the longest hours in the European Union, they have the fewest public holidays. A survey conducted by the TUC last year polled more than 20,000 people, with 99 per cent. wanting an additional holiday—hardly surprising, one might argue. The poll asked people to vote for the most popular time to take an additional holiday: 40 per cent. wanted it to be in the third week of October, which was the most popular of any of the suggested dates.
	Suggestions have been made in this House that we should have an additional holiday to mark the various patron saints representing the nations. Other suggestions have been for a holiday to commemorate international women's day, Trafalgar day or Armistice day. The third Monday in October might fall on Trafalgar day—21 October—in some years, but I am not convinced that a chance to create a new public holiday should be linked to a battle that took place almost 200 years ago. The commemoration of those who died in service to their country in all wars, which is marked by Armistice day, is a commendable objective, but I believe that we have a chance to make our new public holiday mark the contribution of all who work in public service.
	Many families would benefit from an additional public holiday during the week of half-term in October. The date of half-term varies throughout the country, but the most popular time seems to be the third week in October. This Bill would encourage all local authorities to select the same week for half-term to be in line with the public holiday—for example, the third Monday would fall on 17 October this year. A further reason why this would be a good time of the year for a public holiday is that there is a 16-week gap between the public holiday in August and Christmas. That is far too long to have to wait during the darkest, most miserable and depressing months of the year. I know that that does not directly affect Members of this House, but it affects millions of their constituents. How good it would be to leave the summer behind knowing that there would be one more chance of a rest before the Christmas frenzy.
	Of course, it might be argued that those who wish to have an additional day's holiday should be able to negotiate that with their employers, but the reality is that many employees are unable to take additional time from work without pressure from employers. A public holiday is an opportunity for all employees to feel entitled to that day without any fear that employers are losing competitive advantage by granting time off.
	I said at the beginning that I was introducing this Bill for two reasons. The second major reason is to pay tribute to the work that is done by all those who work in public service. I mean the broadest definition of public service, not just those who toil in our hospitals, schools, military, postal services, emergency services, central Government and local government. It would also pay tribute to those who give their time and effort to serve the public good. Every Member of this House will know of the impressive network of community and voluntary activists without whom many of our essential services would grind to a halt. In my constituency, residents organise neighbourhood watch schemes and residents associations, volunteers work with charities and good causes, parents run parent-teacher associations in schools and members of the league of friends assist in our hospital. Those are just some of the people who help to make our lives and our communities work, usually without pay and often without thanks. They are our local heroes and it is to them, as well as our paid public servants, that I would dedicate this public holiday.
	Some would argue and even vote against the Bill. Business, it will be claimed, would have to foot the bill at an estimated cost of £2 billion and suffer reduced productivity. I would argue that giving employees an additional day for leisure, time with their families and rest would be better for business in the long term. British workers already top the poll for productivity, with the least amount of holiday compared with other European countries. Another day away from work will not damage their competitiveness, but may make them more refreshed in the final weeks of the year.
	I urge the House, and particularly the Government, to support this Bill. The British people deserve to have more public holidays. At the very least, the citizens of England, Wales and Scotland should be treated equally with those of Northern Ireland. I am aware that the provision of public holidays is now a devolved issue for the Scottish Parliament. It took little time in recognising that there could be great benefit in an additional public holiday for the Scots, especially where it may result in increased tourism. The Parliament is already consulting on the possibility of introducing a public holiday to mark Scotland's patron, St. Andrew. We should not delay any further; nor should we allow the possibility that the people of England and Wales will become even further disadvantaged by other nations introducing new holidays. I look forward to the progress of the Bill and, with the will of the House, to being able to celebrate public service day.

Eric Forth: The trouble with this sort of thing is that it is one of those motherhood and apple pie issues that sounds so attractive, especially when put so attractively by the hon. Member for Watford (Claire Ward), but it worries me considerably. It is the subliminal message underlying the matter which is bothersome.
	The hon. Lady started out by putting the proposition, which she obviously regarded as unarguable, that the British people were in great need of an additional day's rest. That sets the tone for the whole argument, suggesting that we are so hard pressed, in a rather easy, casual world, that we need more time off. Nothing could be further from the truth. The hon. Lady must listen, until she is as bored with it as I am, to the great leaders of her party talking about the global market and global competitiveness. She went on to compound her crime by saying that the British already work the longest hours in Europe. So what? If the hon. Lady were to look at the unemployment rates in the very countries that she quoted with so much approval, and compare them with those of the United States on the one hand or those of the emerging economies of Asia and the far east on the other, she would be much more worried about the idea of British workers taking yet more time off in an ever more competitive world.
	The whole basis of the argument that started with the proposition that our poor, hard-working people need lots more time off needs to be challenged. I wonder whether the hon. Lady has checked with her Front-Bench colleagues to see whether she is on or off message on this matter. I should have thought that the Chancellor, for example, might well have a word to say to the hon. Lady if he learned that she was arguing that British workers need more time off when he keeps telling us that we need to be more competitive—which, sadly, under his Government and hers, has not been the case. By the way, the hon. Lady's claim that British workers are now the most productive in the world certainly requires some analysis. I put it no more strongly than that.
	Let us move on to the specifics of the hon. Lady's argument. She said that we could do with another day's holiday in October, and I am sure that many people would agree. In fact, I am sure that many of my colleagues would agree. We would probably suggest that we could scrap the May day holiday, with all that it symbolises, and instead have a day off in October. That would be my solution, so that we are not giving people extra time off; we are giving them an alternative day off in the year which would have much more significance. Let us get rid of the ghastly May day and have, for example, Trafalgar day. Why not? It is one of the great days in our history and should be remembered. Or how about Thatcher day or Churchill day? There are any number of possibilities that would bring joy to our people. Instead of the shame of the May day holiday with all its ghastly socialist and communist overtones, we could have a proper holiday in October. I am offering the hon. Lady a helping hand. If her Bill were to make any progress in the House, she and I might work together to amend it to achieve that objective.
	I turn now to my third objection to the Bill. The hon. Lady made a plea for recognition of public service, which she went on to define in two ways. The first was to talk of the voluntary sector. I agree with her that we all now should, and increasingly do, recognise the value of the voluntary sector in our society. That is something that President Bush has been encouraging in the United States, and it is something that my party wants to encourage. We can all agree on that as a worthy objective.
	When the hon. Lady went on to link that recognition to those working in the public sector, her argument became more problematic. We are rather prone in this House to lavishing endless praise on people who work in the public sector, forgetting that those in the private sector arguably work as long, or longer, and harder to create the wealth that pays for the public sector. To single out those working in the public sector for praise and recognition in an additional bank holiday seems to me slightly odd. Certainly those involved, for example, in retail and in other service provision in the private sector might find it rather hard to swallow the idea that their long hours of hard work dedicated to us consumers were being ignored in favour of those doing excellent work in the public sector.
	What I am really saying is that the Bill is wrong at every level. It is wrong because it is arguing for more time off; it is wrong because it does not substitute a day in October for the horrible day in May; and it is wrong because it singles out those in the public sector apparently to the neglect of those working to create the wealth in the private sector. For all those reasons I hope that the Bill makes no further progress.
	Question put and agreed to.
	Bill ordered to be brought in by Claire Ward, Andy Burnham, Mr. Parmjit Dhanda, Mr. Andrew Dismore, Janet Anderson, Mr. Kevin Barron, Shona McIsaac and Mr. Martin Salter.

Public Service (Bank Holiday)

Claire Ward accordingly presented a Bill to introduce a bank holiday on the third Monday in October in recognition of public service: And the same was read the First time; and ordered to be read a Second time on Friday 18 March, and to be printed [Bill 53].

Orders of the Day
	 — 
	Business of the House

Hazel Blears: I beg to move,
	That—
	(1) the Order of 25th January relating to Business of the House be discharged; and
	(2) at this day's sitting, notwithstanding the provisions of Standing Order No. 16 (Proceedings under an Act or on European Union documents), the Speaker shall put the Questions necessary to dispose of proceedings on the Motions in the name of Mr Secretary Clarke relating to Police Grant Report (England and Wales) not later than three hours after the commencement of proceedings on the first Motion, and shall put the Questions necessary to dispose of proceedings on the Motions in the name of Mr Secretary Prescott relating to Local Government Finance (England) not later than three hours after the commencement of proceedings on the first Motion relating to Local Government Finance (England), or six hours after the commencement of proceedings on the first Motion relating to Police Grant Report (England and Wales), whichever is later; proceedings may continue after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.
	The Police Grant Report (England and Wales) 2005–06 and the Amending Report 2003–04 were laid before the House on 27 January. Both reports are due to be considered jointly by the House in the next debate, and this business motion will allow them to be debated at the same time. It will facilitate the discussion on police grant for next year and allow three hours for the debate. Hon. Members will clearly be grateful for that, as it will enable us to explore the issues in considerable detail.
	The Amending Report 2003–04 takes account of changes to Office for National Statistics population data for that year. However, the reports for both years are inextricably linked because the outcome of the amendment proposals inevitably feeds into policing activity in 2005–06, in the number of people in any given area that the police have to look after, and funding in 2005–06 also takes that into account. I hope that the House will agree to the motion.
	Question put and agreed to.

Hazel Blears: I am grateful for the co-operation of the House—

Mr. Deputy Speaker: Order. I admire the hon. Lady's enthusiasm, but we have not quite got there.

Police

Hazel Blears: I beg to move,
	That the Police Grant Report (England and Wales) 2003–04: Amending Report 2004–05, HC 247, a copy of which was laid before this House on 27th January 2005, be approved.

Mr. Deputy Speaker: With this it will be convenient to discuss the following motion:
	That the Police Grant Report (England and Wales) 2005–06, HC 246, a copy of which was laid before this House on 27th January 2005, be approved.

Hazel Blears: I am grateful for the invitation to address the House. I am occasionally criticised for my enthusiasm and the fact that I speak rather quickly in the House. I shall endeavour to speak as concisely as I can, as I am aware of the number of hon. Members who wish to make a contribution this afternoon.
	The Government remain committed to providing the resources that the police need to do their work effectively and to fulfil the many commitments that we ask them to undertake. We will continue to provide further investment, but that will be linked to change and reform of the way in which the service is provided, to make the police even more effective than they are.

Paul Beresford: The hon. Lady will not be surprised to hear that as a Surrey Member I am not enthusiastic about Surrey's proportion of the grant. As the motion will almost certainly be agreed by the House tonight, will she agree to meet me and a few of my colleagues from Surrey to discuss some peripheral issues along the lines of her opening words?

Hazel Blears: If the hon. Gentleman would like to discuss effectiveness, efficiency and how we can work with the police to help them provide an excellent service to his constituents, I am more than happy to meet him and a delegation. I have met several delegations and I am always keen to hear ideas from the front line about how we can be more effective.

Paddy Tipping: My hon. Friend spoke about investment and reform. Nottinghamshire police have had record investment. We have a record number of police officers and the force is changing and performing better. Having visited the area, however, she knows that there are still concerns about the formula for funding police authorities. Will she give a commitment to examine that in the future?

Hazel Blears: My hon. Friend has been a champion of police services in his constituency. I have visited the area on a number of occasions and I have seen the dedicated work carried out by officers there. Since their engagement with the police standards unit, their performance has improved dramatically. I commend the police force for that. My hon. Friend knows that we are considering the formula for future years. That review is taking place together with the Association of Chief Police Officers and the Association of Police Authorities, and we will take account of the need of all forces for sufficient resources. I commend the recent work of the police service in Nottingham, which is making a significant difference for local people.

Phil Willis: We have a fine force in North Yorkshire, which is well led and delivers a good service. Over the past two years there has been a 93 per cent. increase in the precept, which has had a devastating effect on many of my constituents. I now find that some £25 million is currently held in balances, and that 60 per cent. of the capital that the Government have provided for the past three years has not been spent. What steps will the hon. Lady take to ensure that the money allocated by the Government and by council tax payers is effectively spent, not dumped into balances?

Hazel Blears: The hon. Gentleman makes an important point. From the comments that I am about to make, he will see that efficiency savings and an efficiency drive are important this year to ensure a balance between the record amount of central Government investment and the amount raised from local people. We will look at efficiency and the use of balances as well. That combination means that local authorities should be able to provide an excellent standard of policing to their communities without excessive council tax rises.
	Government investment over the past five years has increased by 39 per cent., or more than £3 billion, so significant investment is taking place. Crime has fallen by 30 per cent. since 1997. In the past year, according to the British crime survey—the most authoritative survey that has been conducted under parties of all persuasions—crime is down by another 11 per cent. We are pleased that the investment is producing results. The risk of being a victim of crime is the lowest it has been for 25 years, and fear of crime is also coming down, which I am particularly pleased about.
	We have record numbers of police officers—140,000 in August last year—and of police staff. There were about 4,500 community support officers out on patrol at the end of December, an increase of 400 since September, so we are making excellent progress there. We are making progress on tackling bureaucracy, an issue that concerns all hon. Members. We are trying to get more of our officers out on the front line by using video identification, the Livescan units and our work force modernisation projects. In our recent White Paper, "Building Communities, Beating Crime", we set out an ambitious programme of change. The introduction of widespread neighbourhood and community-based policing will help build trust and confidence in local areas, because there will be much more direct contact with the police service.
	The police funding settlement for 2005–06 will support the priorities that we set out in the national policing plan, which range from tackling terrorism all the way through to dealing with antisocial behaviour and the acts that make people's lives a misery in local neighbourhoods. We have a particular drive to increase the rate of sanction detections, which had gone down in recent years but is, I am happy to say, improving across the board.
	The settlement is considerably better than the police service anticipated. When representatives of Cheshire police authority came to see me recently, they acknowledged that they were about £1 million better off than they had expected under the assumptions that they had made. They still did not think the sum was quite enough and they made some important points to me, but they recognised that it was a much better settlement. The Association of Police Authorities had anticipated a 3 per cent. increase in grant and a possible 3 per cent. precept uplift. We have managed to do significantly better than that.
	We are providing grant to support overall police spending of £11.8 billion. That is an overall increase this year of almost £750 million, or 6.7 per cent. That is a significant settlement, and one of the best in recent years. Central Government revenue grant funding will increase by 5.1 per cent.—that is, 4.8 per cent. in the total revenue grant and 0.3 per cent. in specific grants. There is increased funding for important central support services including IT, extending the DNA database, looking at the Bichard recommendations, and the Independent Police Complaints Commission. That brings the total increase, as I said, to 6.7 per cent.

James Paice: Among all the special payments that the Minister just mentioned, is any funding allowed for the new unit to combat animal rights terrorism, a crucial issue in my constituency? I welcome the tougher line that the Government have taken on animal rights terrorism. Now that we have a national unit, it needs funding to carry out the intelligence work necessary to combat the evil people behind those acts.

Hazel Blears: The hon. Gentleman is right that that work is important. The amendments that we have tabled to the Serious Organised Crime and Police Bill indicate the importance that the Government attach to such work. The funding for the Serious Organised Crime Agency will consist of the existing funding from the agencies that have been brought together, and increased funding of some £24 million to tackle the priorities that have been outlined. I do not have the detail of the exact sum that we will be able to allocate to that important area of work, but I can let him have that as the situation develops. We recognise that an increased focus is needed in order to protect our very important industry and the individuals whose lives have, in some cases, been destroyed by these people's actions. He makes an important point.
	The police grant report deals with Home Office general police grant for revenue expenditure. That is £4,574 million in 2005–06. In addition to that, police authorities will receive £3,043 million of revenue support grant as local authorities. In Wales they will get £14 million of special Home Office grant. There is no floor as there are only four police authorities in Wales, so we have put extra money in to help Wales. The total sum represents an overall increase of 4.8 per cent.
	In addition, we are providing £766 million for specific initiatives and £358 million for capital programmes. There is a 13 per cent. increase in capital support for the police, which I hope will be welcomed. Hon. Members will be aware that we spend a massive amount on our national drugs strategy. Although that is not included in this settlement, £1.5 billion will be spent next year to tackle the scourge of drugs in our communities.

Elfyn Llwyd: Will there be any increase in the rural policing fund?

Hazel Blears: The rural policing fund has been in place for three years. It is £30 million again this year. That is a flat rate. There is no inflation increase for the rural policing grant because we consider it fairer to put the inflation increase into the general grant, but the £30 million is to be divided among the local authorities, which find it extremely useful in trying to improve policing services to their more sparsely populated areas.
	In 2004–05, we took the wholly exceptional decision to provide a broadly standard flat rate increase of 3.25 per cent. to all police authorities in England and Wales. Since then, I have been pressed by many forces to see whether we can move to a more accurate reflection of the funding formula, and I am pleased to say that in this settlement we are able to move some way towards more accurately reflecting the policing needs that the formula has identified.

Geoffrey Clifton-Brown: On policing in rural areas, is the Minister aware that in North Cotswolds, which covers an area of 300 square miles, there is only one patrol car on at night? When I have taken that up with the chief constable he says that there is not enough money in the formula properly to police rural areas. When the Minister is considering the formula, will she look carefully at the real costs of policing remote rural areas? Will she also consider providing more custody suites, because the police have to travel 30 miles to Stroud from parts of my constituency to place someone in custody, and that is an enormous waste of time for police and individuals? Will she consider those two aspects?

Hazel Blears: Yes. I am sure that the hon. Gentleman will recognise that during the past four or five years there has been a massive increase in police investment in every force in the country, including his area, to enable them to provide services for their community. Clearly, the amount of policing in different parts of his constituency and in different parts of the force area is a matter for the chief constable, who must allocate the resources in accordance with the policing needs.
	On custody—we have had this discussion before—it is a matter of getting the balance right: ensuring that we obtain economies of scale in a custody process versus having small custody areas. We are trying, particularly with our civilianisation programme, to ensure that custody services are run in the most cost-efficient way, to free up police officers for the front line, but also to free up some of those resources that are currently used for custody purposes for other important policing activities. These are very much operational matters, but I am delighted that the hon. Gentleman supports our move towards civilianisation and our modernisation of custody procedures. [Interruption.] At least, I hope he supports that kind of reconfiguration.

Dennis Turner: We in the west midlands were clearly delighted with the progress that you are making on the funding formula. We had an increase of £27 million, which was received with great appreciation by the West Midlands police authority, the area's parliamentary Labour group and the chief constable. May I put on the record our sincere thanks to you as the Minister and to our Government for acknowledging the shortfall in the formula, and urge you to continue this work on our behalf?

Mr. Deputy Speaker: Order. The hon. Gentleman has been here long enough not to be using the word "you". I have had nothing at all to do with these matters. But I am sure we are all pleased that those paeans of praise are on the record.

Hazel Blears: None more so than me, Mr. Deputy Speaker.
	I am grateful to my hon. Friend. It was perhaps the comment that I was expecting the hon. Member for Sutton Coldfield (Mr. Mitchell) to make in his contribution. I have no doubt that he, as a west midlands Member, will welcome the record increase of 6.8 per cent. in general grant for the West Midlands police, and I look forward to hearing that.

Elfyn Llwyd: On civilianisation and cutting down on paperwork, the Minister, like me, will know, as a frequent visitor to the Police Federation conferences, that one issue is the form filling. I appreciate that under the Police and Criminal Evidence Act 1984 some are absolutely necessary and have to be adhered to. What work is going on to reduce that huge work load? I am sure that some of the forms are unnecessary and can be done away with, and others could surely be civilianised utterly.

Hazel Blears: We are making progress. More than 7,000 forms have now been disposed of. The hon. Gentleman is right that some of the form filling is about accountability, both under the law and to communities, but we need to bring it down to the absolute minimum. We have now instituted a gateway process whereby for a proposal to get through it has to be scrutinised and be seen to be effective and necessary, so that we weed out not just the forms, but some unnecessary policy items. We have an assistant chief constable who is now focused on this, visiting forces to go out with the officers on the front line to obtain those practical suggestions that often make the most difference.

Andrew Mitchell: When I tabled a question to the Minister asking about those 7,700 forms, she responded that no information on what those forms were was being kept by her officials. Can she do a bit better than that? Could she write to me, or put a letter in the Library, explaining what categories these forms fall into, so that we can understand a bit more clearly how much progress the Government have made in this important task?

Hazel Blears: I will do my best, but I do not propose to ask forces to fill in a form telling me what forms they have disposed of, as that might fall into the unnecessary bureaucracy category. I will certainly do my best to see whether we have any further information on this without putting an undue bureaucratic burden on the rest of the system.

David Heath: I think that I heard the Minister say that there was a significant increase in capital grant amounting to 13 per cent. There is no mention of capital grant within the police grant report that we are debating today, so we are in the dark as to exactly what her intentions are. But the view of the Association of Police Authorities is that the figure for this year is £358 million, an increase of only £3 million over the £355 million last year, which is certainly nothing like 13 per cent., and in fact is less than 1 per cent.

Hazel Blears: We are at one on the £358 million and I will look further into the percentage increase. Perhaps before the end of today's debate I will be able to give the hon. Gentleman that information. If not, I will certainly write to him.
	Last year we had the flat rate increase and we have now moved towards the formula in a better way. There will be a funding floor of 3.75 per cent. to protect forces that would otherwise have fallen below that level, and that is substantially above police pay increases, which are about 3 per cent., and non-pay increases, which are about 2.6 per cent. We have also removed the funding ceiling—something that many people asked us to do—and that has been widely welcomed, and the increases for forces range from the 3.75 per cent. all the way up to the 6.8 per cent. for the West Midlands, and some in between, so it is a very good settlement.

David Drew: Does my hon. Friend accept that one of the problems with smaller forces such as Gloucestershire is that the perceived efficiency savings impinge quite hard now? To be fair to the Gloucestershire force, it has made efficiency savings over the years, but it is beginning to come to the end of those. Will she assure me that there is realism in what efficiency savings are expected to be made?

Hazel Blears: Yes, we are realistic, and police services have a good record on achieving efficiency savings. We think that what we have asked them to do is realistic. My hon. Friend makes the point about smaller forces, and that is why we have told them to work together. We now have regional groups considering efficiency, because economies of scale are often to be had by forces working together, not just with the police service but with their local authority colleagues, on call centres for example, squeezing more efficiency out of the system in that way.
	Pensions have been a big issue this year. Many police authorities have said that there is a spike in the pensions costs because there is the 30-year retirement after the big recruitment campaign about 30 years ago. We were able to put an extra £20 million, a special uplift of 0.25 per cent., into the grant in order to take account of that. For next year we have proposed to change the pension system so that we will reduce the volatility that is out there, and the risk of that volatility will be held at the centre, in that there will be a separate pensions pot in which people will put their employee and employer contributions, and if that is not enough to meet the pensions requirement, the Government will top it up. That should even out the spikes that we have seen in recent years, which will be hugely welcomed by police authorities throughout the country. The pensions system is changing quite dramatically as well and will be less expensive in future and provide a better range of more modern and flexible benefits.
	I have spoken about the formula review, on which we are now engaged. We also want to try to ensure that the formula better reflects the domains that are in our police performance assessment framework, and that work is ongoing. Again, that will make the funding system more transparent and more easily understood. We are also working with our local government colleagues to look at the possibility of three-year settlements, which again would give some stability and enable people to look ahead and be sure of the funding available.
	We want to see 3 per cent. efficiency savings, half of which is to be cashable and half non-cashable, and all used to reinvest in services or, I hope, to keep the precept down as well to ensure that we have reasonable council tax increases of less than 5 per cent., as the Deputy Prime Minister has made clear. Last year, 11 police authorities achieved efficiency gains of 3 per cent. or more, so I think that is a realistic expectation. I know that it is tough, so we are supporting the police in achieving those gains. I am told that forces such as Thames Valley provide horses and mounted officers for a number of adjoining forces, which relates to the point made by my hon. Friend the Member for Stroud (Mr. Drew) about small forces having to provide such things on their own. South Wales has reorganised its custody function to release its officers to the front line, and it has managed to get more efficiencies in that way.
	We also need to keep pressing on sickness rates both in the police force, in terms of officers, and among police staff. The figures are still too varied. The best force is down at 6.1 days per officer per year lost through sickness, while the worst is still at 13.8 days. That is a big variation, and there is more to be done on that issue.
	For the first time ever, we have the front-line policing measure, enabling us to see the amount of time that officers are spending on front-line duties. If we can get the figure up from the current 63 per cent. to about 72.5 per cent., we will be able to release the equivalent of thousands of officers back on to the front line to do policing in their communities. That is a very important issue for us.

Judy Mallaber: On pensions, I was pleased to hear this morning that my hon. Friend's Department has found a way of correcting the mistake of the Government actuaries in assessing the Derbyshire police pension fund, so it will get back its missing £500,000. In view of the continuing pressures on the budget, however, and the need to review Derbyshire's formula, along with others, and to preserve our excellent record, including record police numbers and a fall in crime of more than 14 per cent. in the past year, will she give me an assurance that when the amending report on this matter is produced next year, the figures will be fully assessed and agreed with Derbyshire, so that there is no detriment to the service in that report? Will she put that in writing, in reply to the letter that I sent her last week?

Hazel Blears: My hon. Friend is right to highlight the calculations in respect of Derbyshire. I am aware of the issue and I am giving it my close personal attention so that we can try to ensure that the police authority is not in a detrimental position. I undertake to write to her. I know that the force is doing in an excellent job in providing good policing to its community, and I want to do everything I can, along with my colleagues in the Office of the Deputy Prime Minister, to ensure that the force is not in a worse position than if we had got the data correct in the first place. I am glad to give her that reassurance.
	On precepts, as I said, we expect council tax increases to be no greater than 5 per cent., and we think that the budget settlements for local government and the police authorities can help us in that regard. The Deputy Prime Minister has made it clear that we will use our capping powers if necessary. In fact, we were able to get possible police precepts down from the high 20s last year to about 12 per cent. by making it clear that we would be very firm in this area. I shall certainly take a close interest in the capping criteria and work closely with my hon. Friends to look at the impact on police authorities.
	Since we published the provisional settlement, I have received representations from 32 police authority areas. I received 45 representations this year and 63 last year. Perhaps that reduction is indicative of how generous the settlement is this year and suggests that people feel a little more reassured by it. The representations fell into 11 broad areas and covered a range of issues. I am informed that none of them covered the licensing issues, which is interesting in view of the salience of those issues in recent times.
	I think that I have dealt with pensions, on which we are making good progress after many years of not reforming the scheme. I know that many forces have been concerned about probationer training costs. We are now delegating training to forces themselves. Instead of training being done at the centre through Centrex, we are saying that it is important that our initial probationer training is carried out in the community. I hope that that will mean that we can attract a wider range of recruits, including people who have family responsibilities and who do not want to spend 12 weeks in a residential setting. Such training is now increasing, but we want to ensure that we provide some additional funding to forces if they are going to take on that extra responsibility of probationer training. We will provide extra revenue funding for the transitional costs of £1,900 per recruit, and there will be extra capital funding of £7.5 million to help that transition, and £4.8 million of revenue funding for forces that are early implementers of the new probationer training scheme. The fact that training will be done together with members of the local community will help us with neighbourhood policing, because we will begin to get some very different attitudes and work.
	We continue to provide the crime fighting fund, which has enabled us to fund 9,560 officers over the past few years, and we have put £8 million inflation into the fund and £18 million to support the special priority payments that have been paid to officers carrying out particularly difficult jobs. We have also put extra funding into the Metropolitan police: their general grant increase is 5.8 per cent., so they have a good settlement this year. We have increased the capital city functions for the Met by £10 million, to £217 million, and they will also get specific counter-terrorism funding to enable them to carry out that work. They get £61 million in ring-fenced counter-terrorism funding, and the provincial forces will receive £35 million of revenue and £8 million of capital for that dedicated and very important counter-terrorism work.
	We will continue to provide £50 million—we are providing it again this year, for the third time—to basic command units for them to use together with their crime and disorder reduction partnerships in local crime reduction initiatives. That has been one of the most useful funds for the police, as it is completely flexible and they can use it to lever in extra funds from their partners to drive down crime. That is why we have seen burglary, vehicle crime and robbery fall so significantly.
	We will also continue to fund the community support officers. We have put £50 million into the neighbourhood policing fund for the extra tranche of CSOs, who are hugely welcome in communities. We continue to fund Airwave, and we are putting a final £17.3 million into Airwave support, because some forces have been delayed in rolling it out. I was up in Cumbria just last week looking at the dreadful effects of the floods. The local force did not have Airwave because the earlier foot and mouth problems had prevented it from putting up the masts, which was a difficulty during the flooding crisis. We are ensuring that it gets the full amount, despite the delay. It borrowed Airwave from its neighbouring force during the flooding crisis, and they found it an incredible improvement for communications. They borrowed the handsets and were able to use the system.
	The street crime initiative has now been going for a couple of years. It should have come to an end this year, but we are again providing a grant of £6.5 million to ensure that the lessons from the initiative can be learned and mainstreamed. I see that the hon. Member for North Thanet (Mr. Gale) is in his place. I am pleased to say that we are providing some street crime moneys to British Transport police, and we are also providing some Airwave moneys and terrorism funding to them. I hope that he will feel that I have taken note of some of his contributions on how important the British Transport police are in protecting our infrastructure in this country. I have also mentioned the Serious Organised Crime Agency, which will be funded to carry out its very important work.
	I commend the police settlement to the House. It is a very generous settlement this year. There will always be more that people want and more that we can do, but we have taken another £50 million out of the general Home Office budget on top of the £100 million that we took out last year in order to maximise the income and grant for the police service, because we recognise that that is a top priority for every single community in this country. Tackling crime, making our communities safer, giving people that essential reassurance and ensuring that the police are visible, accessible and responsive to the communities that they serve will continue to be an absolutely top priority for this Government, and results really will be delivered from the investment that we are commending today.

Andrew Mitchell: Let me first and foremost put the Minister's fears to rest: the Opposition will not oppose the two motions. Indeed, we have decided that in certain circumstances, which I shall describe to the House, spending on the police will have to be increased further.
	The Minister made specific mention of the settlement in the west midlands, and it would be churlish of me not to say that we are all pleased that the former Home Secretary, to whom I made representations, along with many other west midlands Members of Parliament, acted and that our voices have been heard in the Home Office. That goes some way, although in my view not far enough, to address the £27 million shortfall last year in the west midlands and, indeed, the £27 million shortfall the year before.
	In any debate about this year's funding settlement for the police, we need to consider more carefully than the Minister did the context of rising police precepts throughout the country. The police precept increased by more than 87 per cent. during the three years to April 2004, which represents an increase in local taxation of nearly £1 billion. Assuming an average cost of £50,000 per officer, that could have paid for 19,110 fully trained policemen and women. However, because of the excessive costs and bureaucracy that the Government have imposed on the police, police numbers have risen by only 16,386 during that period. In other words, the public have been short-changed by 2,724 police officers. In the west midlands, which includes my constituency, the public have been short-changed by 549 officers. In Greater Manchester, which includes the Minister's constituency, they have been short-changed by 857 officers.
	The Minister said in her written ministerial statement on provisional funding last December:
	"If police authorities deliver efficiency gains, and exercise judicious  . . . planning, there is no reason for police authorities to set excessive increases in police precepts on council tax next year."—[Official Report, 2 December 2004; Vol. 428, c. 55WS.]
	She thus said that an excessive burden would not be placed on council tax payers, but we dispute that judgment. Owing to the gearing effect, any increase in the council tax precept involves a high overall increase in council taxation. The average increase in tax doubled from 12.2 per cent. in 1996 to nearly 24 per cent. in this financial year. Although central funding amounted to 80 per cent. of police funding in 2001, it now amounts to 70 per cent., with local authorities left to provide the rest.
	Let me be absolutely clear. Following a Conservative election victory, we will immediately set about the task of ensuring that Britain has an extra 40,000 policemen and women. The proposal is costed and it is an absolute commitment to be implemented over eight years. Some 5,000 extra officers, which is the current maximum training capacity, would be recruited each year. There are no ifs and buts in the proposal, and it will be clearly set out by my right hon. Friends the shadow Home Secretary and the shadow Chancellor in our election manifesto.
	This year's settlement is at least an improvement on that of recent years, so it is to be welcomed. I congratulate the police authorities, and councillors and hon. Members of all parties, who persuaded the Home Office to reverse its clear previous indication that it would give a lower settlement. However, the Minister will forgive me for a modest degree of cynicism as I probe a little further for the reasons behind that.
	In 2003–04, the average unhypothecated increase was 4.3 per cent. In 2004–05, the increase was 3.25 per cent., which had serious repercussions for forces such as mine in the west midlands. This year—surprise, surprise—the Home Office has decided to give an increase of 5.1 per cent., which is 6.7 per cent. when one takes account of  the increase in central funding for police communications, information technology and support services. It is, of course, a mere coincidence that that sudden burst of generosity comes a couple of months before a general election.
	Nevertheless, was it really necessary to cause the anxiety to local government and the police that led this year to the Association of Chief Police Officers issuing statements of profound concern following Home Office briefings that the settlement would be a flat-rate, real-terms increase of about 3 per cent.? Is it really necessary to keep police forces and police authorities in the dark in such a way? Police authorities should not think that they are facing deficits of millions of pounds just a few weeks before the Home Office unveils the funding figure.

Judy Mallaber: Is the hon. Gentleman suggesting that it is somehow wrong for the Government to respond to representations and thus come up with a generous settlement after taking account of all considerations put before them?

Andrew Mitchell: What was wrong was the extensive game of cat and mouse that was played with the people who implement decisions on the ground. I shall later address a way in which we can help the Government to ensure that that does not happen in the future.
	I can tell the House that the Conservative party, when re-elected, will make local funding more sustainable by ending the current system of annual grants and moving to a system of three-year budgets. That would enable thepolice to make their strategic planning and implementation more effective, and end the unsatisfactory routine of short-term initiatives that last only a year or two before their funding dries up.

Kevan Jones: If the shadow Chancellor is going to cut the budget, will the hon. Gentleman explain how extending it over three years will make any difference?

Andrew Mitchell: The hon. Gentleman is not listening to what I am saying. Three-year budgets would make it much easier for those with the difficult job of implementing such measures to work out how to fund police work locally.
	I want to ask the Minister several detailed questions. She helpfully said something about pensions and mentioned the expected 12 per cent. increase to the cost of pensions this year. The money that has so far been made available to address the situation has not been anything of that order, so the House is entitled to a commitment in her winding-up speech that she will keep the matter closely under review. What will happen about the considerable costs not funded by the settlement that are associated with IT and technological developments, including the important yet unfunded recommendations of the Bichard report and the costs associated with the Government's deluge of Home Office legislation?
	We should consider not only inputs, but outputs, because it is clear that the Government's record on that is truly appalling. The Minister frequently cites the British crime survey, but she knows perfectly well that it does not include one of the fastest growing areas of crime, which is crime against children. It excludes specifically the most serious crimes and the survey embraces only 40,000 people. The fact that it is a flawed way of identifying trends in crime was why the leader of her party, when he was shadow Home Secretary, persistently rejected it and said that he preferred to deal with recorded crime figures. I agree with the leader of the Minister's party and disagree with her.
	The sad facts are these. Violent crime in Britain has virtually doubled under the Government and, for the first time ever, the number of such crimes has risen to more than 1 million. There is a specific worry that youth crime is out of control, with a massive growth of 63 per cent. in persistent young offenders appearing before our courts. Meanwhile, detection rates have slumped. Detection rates for burglary have practically halved under the Government. For the record, before the Minister asks, when my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the leader of the Conservative party was Home Secretary, recorded crime fell by the largest amount since records began, but under the Labour Government, recorded crimes are up by 800,000. These are extremely serious matters, so we must examine outputs to discover how the Government's policies on law and order are proceeding.
	What is the Minister's estimate of the time and cost that will be incurred policing the Government's legislation to allow 24-hour licensing? Stephen Green, the chief constable of Nottinghamshire police and ACPO's spokesman on alcohol-fuelled violence, has warned specifically that policing the new measure will
	"deprive people who need our services most"
	because it will tie up police power and divert the police from other vital tasks.
	What will the Minister do to help Lincolnshire police, which faces a £4 million shortfall in meeting its requirements, although the Government have presided over a doubling in violent crime since 1997? Following the intervention made by the hon. Member for Stroud (Mr. Drew) and the comments of my hon. Friend the Member for Cotswold (Mr. Clifton-Brown), will she say a little more about Gloucestershire police, which is extremely worried that it will face a shortfall of £1.1 million merely by maintaining front-line services? What can she do to assist Gloucestershire police? The excellent chief constable of the force, Tim Brain, described her settlement as "an undoubted disappointment".
	What comfort was the Minister able to give to my hon. Friends the Members for Eddisbury (Mr. O'Brien), for Tatton (Mr. Osborne) and for Congleton (Ann Winterton), other Cheshire Members and the chief constable of Cheshire police when they warned her that as a result of the Government's settlement, the people of Cheshire face a significant hike in their council tax or a reduction in front-line policing—or both? They face the prospect that uniformed officers will have to fill up to 50 civilian posts. Such direct worries—hon. Members of all parties could give further examples—show the way in which the settlement rubs uneasily against local circumstances. I will be grateful if the Minister comments specifically on those two points.

Stephen O'Brien: I am grateful to my hon. Friend for highlighting the very serious challenges faced by the police in Cheshire. The tension arises between the exhortation, whether directly by the Minister or by others, to seek the flexibility to put up the council tax precept, over which they will have no control, versus the obligations put on the police and the expectations that the Government have raised in the population of Cheshire regarding police resources. Does my hon. Friend agree that in fairness the Government should fund that instead of asking councils, yet again, to raise taxes?

Andrew Mitchell: My hon. Friend makes a powerful point that the Minister will want to pick up when she winds up.
	I turn to the way in which the Government make this money available to local forces. Significant sums arrive ring-fenced for particular schemes that are dictated by the Home Office, not by local circumstances and needs. The Minister mentioned many of them. We are told that £277 million will be available through the crime fighting fund. There will be nearly £61 million for the Metropolitan police and £35 million for other forces for counter-terrorism; £50 million for basic command unit funds; £210 million for the safer and stronger communities fund, which is clearly a breach of trades description legislation, since virtually no communities are safer or stronger under this Government; £69 million for the special priority payments fund; and £6.5 million for phone theft and other robberies. Two grants arering-fenced for community support officers: £49.5 million for continuing support of CSOs recruited in the first three rounds and £50 million for additional CSOs in a new neighbourhood policing fund. If one assumes an approximate cost of £50,000 per officer, that money alone could have made available an extra 2,000 policemen and women.
	I draw the Minister's attention to the fact that in Hampshire, the police authority decided by a majority of two to one to reject ring-fenced funding from the Home Office for CSOs. Its chairman, Simon Hayes, said:
	"If the Government is making money available we would like to be free to spend that on properly trained police."
	As long ago as 2001, in a very balanced set of remarks, the Association of Police Authorities said:
	"Central funding to pump prime new initiatives and priorities can be effective. However, the growth in funding now held centrally by the Government is reaching a level where local discretion—and the ability of Police Authorities to invest in local initiatives to meet the needs of local communities—is being threatened."
	The next Conservative Government will scrap all this micro-management in favour of a much more honest and straightforward approach. Money from central Government will come in a block grant. The days of ring-fenced funds will come to an end. Central Government will no longer hold local policing to ransom by keeping control of the purse-strings in this way. We will not force police forces to choose between the latest gimmick handed down from Whitehall or increasing the number of bobbies on the beat. The funding settlement will be transparent and the funding formula will be simpler. Under the Conservatives, there will be no more fiddled funding for the pet projects of politicians in Whitehall.
	Along with micro-managing funding comes this Labour Government's obsession with micro-managing how policing takes place around the country. No wonder police morale, described by the Home Secretary when he was last a junior Minister in the Home Office as being defined by the number of people leaving the service, has fallen sharply. The Government have been somewhat evasive about the number of police officers resigning from police forces, but we know that the number of resignations more than doubled between 1997 and 2002. In 1997, there were 774 resignations. In 2002, there were 1,634—an increase of 112 per cent. Needless to say, since then the Home Office has stopped recording the number of resignations in its reports on police service strength. In October, when the shadow Home Secretary tabled a parliamentary question to identify how many resignations had taken place, the Minister advised that those figures were no longer kept.
	Police morale is low because local policing is fettered by this Government's obsession with micro-management, targets, bureaucracy and top-down management. It is low because of the state of the criminal justice system, whereby even if more villains were arrested, courts in many parts of the country, including London, would not have the capacity to process them; and even if they did, the prisons are bulging at the seams. Even if the police solve a crime, the courts convict, and the prisons accommodate, 90,000 criminals have been let out of prison under the home detention curfew scheme. What thanks and encouragement does that offer to our policemen and women?
	A good illustration of morale in the police today can be deduced from a poem written last year for the Christmas edition of the Police Federation magazine, which is no doubt required reading for the Minister as well as for me. It was penned by a constable who has worked on the streets of Merseyside for 18 years, and it sums up how our police feel let down by this Government. If I may, Mr. Deputy Speaker, I should like to quote a few lines:
	  "We are thin on the ground and spread all about
	  Whether we can cope is always in doubt
	  Officers are now managers and always pressing
	  For figures that make for good window dressing
	  The Sergeants they work in total despair
	  In front of computers, glued to a chair
	  The troops themselves used to carry cuffs and staffs
	  We now go out armed with pie charts and graphs."
	He expresses the lack of morale and concern of the police extremely clearly and well.

Stephen O'Brien: I dare say that my hon. Friend is aware that one of the major complaints of the police at all levels has been that the removal of the policeman's notebook means that they have to do everything in triplicate through e-mail and now have to spend the first hour or even two hours of their day checking all their e-mails before they can get out on the streets. Will he urge the Minister to look at the basis on which that evidence can be adduced in court, not least because there was nothing wrong with notebook evidence in the past?

Andrew Mitchell: My hon. Friend makes an interesting and helpful point. I have no doubt that when the House debates the specific subject of police bureaucracy we shall return to the Government's appalling record in that respect as well.
	After eight years of Labour Government and cynical waffle about being tough on crime and tough on the causes of crime, we have a demotivated police force who are tied up in bureaucracy, central Government diktats, performance indicators and red tape, and unable to respond to local requirements and local demands in the way that they would wish.
	Above all, we have had eight years of rising crime. These are the Home Office figures: total crime is up 16 per cent. since 1998; violent crime is up 83 per cent. and has now passed the 1 million mark for the first time ever; and gun crime has doubled under Labour, with a gun crime committed every hour of every day. Before the hon. Lady protests about our record, I have consulted the Library and discovered that when my right hon. and learned Friend the Member for Folkestone and Hythe was Home Secretary, gun crime fell by a third—32 per cent.
	Meanwhile, detection rates for all types of key offences have fallen since 1997. Fewer than one in four sexual offences and fewer than half of all violent crimes are cleared up. Fewer than one in seven burglaries is cleared up, and last week the latest quarterly statistics showed that crime levels are continuing to escalate. The Minister can repeat as often as she likes that crime is falling, but the public know differently and her own Department's website makes it clear that the figures are very different. Only last week, we saw that violent crime was up yet again, by 6 per cent.; firearms offences were up by a further 5 per cent.; and sex offences were up by a massive 22 per cent.
	The most important fact in this debate is that the long-suffering taxpayer has paid up—massively so—yet the Government's performance in cutting bureaucracy, supporting the police and cracking down on crime and disorder is a woeful litany of failure. It is the public who will hold this Government accountable for that.

Mr. Deputy Speaker: Order. I should remind the House that there is now a 12-minute limit operating on speeches from Back Benchers.

Tony Lloyd: I join my hon. Friend the Minister in saying clearly that tackling crime is the highest priority for most of our constituents. I find it difficult to recognise the picture painted by the hon. Member for Sutton Coldfield (Mr. Mitchell), yet I come from a constituency in the inner city of Manchester, which historically has among the highest crime rates. We knew about gun crime long before many people in the rest of the country were even prepared to talk about it other than to condemn it as a blight on cities. Sadly, it was during the period of the Conservative Government—I do not make this as a political point—that gun crime became entrenched in our society. We all have to consider how to eradicate that problem of guns in our society. That goes way beyond the parameters of party political debate. It is a serious issue, which affects the lives and the deaths of my constituents and many others.

Andrew Mitchell: That is precisely why the Opposition are so concerned about it. Although I fully respect the hon. Gentleman's impression, the facts—the recorded crime figures—show that gun crime has doubled under this Government. Yet it decreased by 32 per cent. in the period when my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) was Home Secretary. Those are not impressions but facts.

Tony Lloyd: I am not talking about impressions. I am well aware of what happens with guns in my constituency, and there is no doubt that more gun crime occurs now. We must strive against the culture of gun crime, but that will not happen through party political polemic. We can drive it down only if we examine practical ways in which to get guns off the streets of our cities and to change the attitudes, especially of young men, towards the desirability of guns. Perhaps on a different occasion the House should debate the issue, which is one of the most serious problems that the country faces. Gun culture is growing, and if we do not strive against it, we allow it to grow. Sadly, our experience is that it has been growing.
	As I said in the past about hard drugs, people made the mistake of wanting to view the problem as ghettoed in the inner city. Drugs are now a problem throughout the country. We must not make the same mistake with guns. Gun crime will not be confined to specific parts of the country. If the culture of the gun becomes widespread, we all inevitably become its victims. The problem therefore affects us all.

Andrew Mitchell: I dispute the hon. Gentleman's view that we are raising the matter for party political reasons. I share his analysis of gun crime. He will remember that I used to be a Member of Parliament for part of Nottinghamshire, which has suffered particularly from the culture of gun crime that he describes so accurately. For all the reasons that he gave, no one would be more pleased than Opposition Front Benchers if the Government could bring this appalling scourge under control. I would be the first to congratulate the Minister. However, in the absence of that, it is the Opposition's duty to identify the problems and demand action on behalf of those whom we represent. I am seeking to hold the Minister to account on that point.

Tony Lloyd: The hon. Gentleman speaks for himself, and I want to make some progress. However, the subject is also important because it is relevant to another matter: the Opposition's assertion that they would move to a system of total block grants.
	I hope that my hon. Friend the Minister will not listen to that sometimes seductive argument for total block grants. There are some issues—gun crime is one—that require us to acknowledge that some areas suffer disproportionately, and it is therefore necessary to target resources at them. The police tell me that each gun murder costs roughly £1 million to investigate. That is an enormous sum for a police force such as mine, which has to deal with a disproportionate amount of gun crime. I hope that we can reflect on what that means for policing. I repeat that if gun crime is not checked in an area like my constituency, guns will spread throughout the country. Everyone therefore has an interest in ensuring that my police force has the resources to deal with the problem.
	I welcome my hon. Friend the Minister's comments on the way in which pensions fit into funding. That has been a problem for many years. Indeed, almost throughout my time as a Member of Parliament, I have made representations to successive Home Office Ministers about the impact of pensions. Greater Manchester police believe that the increase in the contributions to their pension scheme will be £9.5 million. That is an enormous sum for a police force, and the discretion over spending is inevitably narrowed if we take into account the fact that the bulk of the budget is already committed to paying existing serving officers and support staff. The figure of £9.5 million therefore makes a genuine difference. I hope that my hon. Friend can elaborate on the operation of the new system later, if not today.
	Figures are always hotly disputed between hon. Members who represent different police forces, but Greater Manchester police claim that they are disproportionately hit by the pensions problem. We can resolve it only if, as the Minister said, there is an attempt to move beyond the funding system of the past and begin to acknowledge that some sort of central processing at least irons out the differences in the impact on police forces. If my hon. Friend can devise a workable system, it will be welcome in a city and conurbation such as Greater Manchester.
	I want to raise a matter that I can only believe is a quirk and not something that is deliberately built into the system. Greater Manchester police—my hon. Friend the Minister's local police force as well as mine—tell me that they will lose approximately £1 million through withdrawal of moneys from the crime fighting fund. That has happened because they recruited 50-odd officers on 29 March last year. The way in which the crime fighting fund budgets are calculated means that Greater Manchester police will no longer qualify for money from the fund. However, if they had recruited the same police officers three days later, on 1 April, they would have qualified. I do not believe that anybody designed the system to have that effect. If the account that I received is accurate, I am sure that Home Office Ministers will want to resolve the problem, and that they could do it relatively easily. Those sums are not trivial, and could have a genuine impact.
	My hon. Friend will know that there is concern in Greater Manchester about the relationship between the police authority's funding and its ability to precept from the local authority. There was an ambition to go above the 5 per cent. that the Government now insist applies uniformly. The worst fear is that driving the precept down to 5 per cent. will make it difficult to maintain current staffing. Such matters are always hotly disputed and it is difficult to get to the bottom of what funding does and does not do. Every year the story is confused until reality somehow emerges later. However, I ask my hon. Friend to consider carefully the impact on Greater Manchester because, as she knows, we have made genuine changes. The police are making proper managerial changes and the system is now operating more efficiently.
	It is always to difficult to know what sort of value for money we get from our police forces. That is a national issue, which is not confined to my police force. Police in Greater Manchester tell me that they know that they needed to make enormous changes, and that they were not efficient in the past. They also say that they are making those changes. Sometimes I believe them but at other times, I must say that I am a little more despairing and sceptical. However, we need a basis for beginning genuinely to compare like with like. Our debate today will—inevitably and rightly—focus on the pleadings of individual Members of Parliament about the impact of funding on their areas. That is not the most rational way in which to debate the funding of an important national service. The time has come for measures and mechanisms whereby we can make comparisons and work out what we are getting.
	For example, this year my police force tells me that it is disadvantaged in funding when compared with West Midlands police, with which it is normal to compare the police force in a conurbation such as Greater Manchester. I find it almost impossible to know whether the assertion is true. However, when I hear the hon. Member for Sutton Coldfield telling the Minister that the west midlands has a good settlement, it leads me to believe that there is some justice in the statement that Greater Manchester is relatively disadvantaged. However, how can I know that? How can I know that my police force is using the money as wisely as it should? So I appeal to the Minister to develop a proper means by which we can all judge value for money in the service, which we all agree has the highest priority for all our constituents.
	This is an important debate, and it is interesting to see how few people are in the Chamber. That might indicate that the Government have got it significantly right with the funding generally. My own comments inevitably involve a slight amount of special pleading, because I represent a high crime constituency. I genuinely believe that my constituents feel that we are making progress on policing, but we still have an awfully long way to go. I appeal to the Minister to ensure, even at this stage, and even if fine-tuning is necessary, that Greater Manchester gets the benefits that are being applied elsewhere. I know that she will keep her door open and continue to listen as the process continues in the coming weeks and months, so that we can guarantee proper policing for our adjoining constituencies.

David Heath: It is a pleasure to follow the hon. Member for Manchester, Central (Tony Lloyd), who has just made one of the most rational speeches I have ever heard in one of these grants debates. I am grateful to him for that. I hope that we shall soon not need to have debates on council tax, because I hope that that unloved, unfair relic of a previous Administration will eventually be consigned to the dustbin of history. The way in which it works at the moment certainly does no favours either to us or to our constituents. Following revaluation next year, there will be a massive increase in council tax for practically every household in towns in the south, and particularly in the south-west, where house prices have increased by well over 200 per cent. That will be entirely unacceptable. It would be far better to find a more realistic option now than to wait for the time bomb that was set ticking by the previous Conservative Administration, and allowed to tick on by the present Government, to explode, which will cause a great deal of difficulty for an awful lot of people.

Elfyn Llwyd: In supporting the hon. Gentleman's argument, may I tell him that the rebanding exercise is continuing apace in Wales? Even modest properties there are now jumping up two or three bands. That is causing extreme hardship, and I hope that lessons will be learned from the Welsh experience.

David Heath: The hon. Gentleman is absolutely right. Some areas of Wales are similar to areas in the west country, where house prices are often inflated—not by local interest but by outside interest—out of all proportion to the average earning power of the residents. We had a clear message from the Minister for Local and Regional Government when he said that only when the change in a property's value is significantly above or below the average is it likely to change bands. Well, the average is 160 per cent., so we will be well over that threshold in the south-east, the south-west and parts of Wales, which will result in massive increases. That is perhaps a matter for a later debate, however.
	We have seen a significant increase in police funding and police council tax in recent years. To be fair, we have also seen a significant increase in police numbers. My huge criticism of the Government, as the Minister for Crime Reduction, Policing and Community Safety knows, is that when they came to power in 1997, they stuck to the meagre budgeting proposals of the outgoing Conservative Government for two years and refused to recruit the extra police officers who should have been recruited at that stage. There was therefore a delay in improving the situation. The fact is, however, that those police officers are now being seen on our streets and in our villages, and that is something that we should welcome.
	I have to say, however, that that increase was not the doing of central Government. It is being paid for by the council tax increases that our residents have had to pay. The increase in police numbers is being paid for almost entirely from local taxation. That worries me, because it will be a fragile increase if it is sustainable only by massive increases in council tax, which most of our constituents would find unacceptable.
	When asked, people are normally prepared to pay a little more if they think that they will get better policing. The difficulty that we have experienced until now, however, is that people have been paying a lot more without seeing the extra police on their streets. That is particularly true in police authorities such as Avon and Somerset, which covers a large conurbation as well as a large rural area. Inevitably, the big city acts as a magnet for resources, because that is where the crime levels are highest and where the chief constable applies the resources, for obvious reasons. People in rural Somerset are paying an awful lot more without seeing any extra police to represent that extra investment.

John Horam: That is also true of London, where the inner city attracts all the extra support while the outer suburbs and rural fringes get very little of the extra resources coming from Mayor Livingstone.

David Heath: The hon. Gentleman is right. That problem bedevils the metropolis as well as the shire forces. There is an answer, however, and it is one that I have strongly promoted. It is simply to relate the policing of an area directly to the amount that people pay to support that policing. It would involve a minimum policing guarantee that would derive from debates held in the local area involving the borough council in the hon. Gentleman's case, and the district councils or county council in my own, as well as the police authority. There would be a guarantee that if people paid extra, they would get the policing that they had paid for. That would be a much more satisfactory way of organising police funding.

Kevan Jones: I am fascinated by the hon. Gentleman's suggestion. If a community such as mine were to adopt the Liberal Democrats' local income tax proposals, the amount of money contributed by some of the outlying villages in which unemployment is high and where many old people live would be quite small. Is the hon. Gentleman suggesting that those villages should get a poorer service than the wealthier parts of my constituency that could pay more?

David Heath: Transparently not. The hon. Gentleman would not wish me to spend the next 20 minutes explaining in detail the mechanisms of equalisation, or the contribution made by central Government. I want to reduce neither the flexibility of chief constables to deal with crime effectively nor the contribution of central Government. I am simply saying that—

Kevan Jones: rose—

David Heath: I want to answer the point that the hon. Gentleman has made.
	There should be a level of policing for each area consistent with that area's needs. We should not have to see, as we do at the moment, a reduced level of policing, or abstractions to deal with every incident in the big cities, which denude rural areas of the police that they need—[Interruption.] It is interesting that Labour Members should jeer at this idea. If they ask people in their constituencies whether they want to see the police that they have paid for on their streets or in a city 40 miles up the road, they will say that they want them on their streets. The Labour party had better get its head round that pretty quickly.
	The settlement is better than we had feared it would be, and I am extremely pleased to be able to say that. The Minister knows that we had debates on this matter prior to the announcements, at which time we heard the advice of the Association of Chief Police Officers and the Association of Police Authorities. They were extremely concerned not by a figure that they had plucked out of the air, but by the Home Office's own figure, as we were anticipating a 3 per cent. increase this year. They knew perfectly well that they needed a 5.7 per cent. increase to stand still. That huge gap between the two would have resulted in very difficult decisions for many chief constables and many police authorities.
	Instead, we have a settlement that, as the Minister has said, gives us a 4.8 per cent. increase—but may I make an obvious and necessary point? That is an average, so some authorities—West Midlands is a case in point, as is Greater Manchester, which has done better than average—have done well out of this. I cannot grumble about that average figure in terms of my authority, Avon and Somerset. We have less than the 5.7 per cent. that we would have liked, but it is better than the average.
	That, however, hides the fact that many authorities will do an awful lot worse. The figure for London is over 6 per cent, while the average for the metropolitan authorities is a little over 5 per cent. and for the shires a little over 4 per cent., but 15 authorities are on the floor—the 3.75 per cent. increase. That will pose huge problems for them. It is better than their worst fears, but very far short of what they would have hoped for or what they think they need to maintain their services.
	In some cases, there has been an adjustment because of the errors in the census figures. Although I strongly support the Home Office in applying a floor system that means that authorities have not gone below that floor as a result of those adjustments, this is nevertheless not a satisfactory way of doing business with local government.
	The key now is how the capping criteria will be imposed. We have had a clear message from the Office of the Deputy Prime Minister that capping will be applied to police authorities. Last year, it was applied—I think absurdly—to West Mercia police and others. If the cap is set too low so that police authorities do not have the flexibility to maintain their services, we will still have, as Chris Fox, president of the Association of Chief Police Officers, said,
	"a very difficult year for policing."
	I want the Minister to be absolutely clear about what the capping criteria are. She said that she would have close discussions with the Minister for Local and Regional Government; I hope she does. I think that she wants to achieve the same objective as me in these matters, which is not excessive council tax increases, but ensuring that the effectiveness of the police service is maintained. That will be much better organised if we know what the criteria are and what is expected of the police authorities.
	I am pleased that the rural fund is being maintained, as it is a key part of the equation for many rural forces because of the extra costs of policing rural areas— although I wish that it were not decided year by year. If we achieve a three-year rolling funding programme—I know that that has been promoted by local authority associations for at least 20 years, because I have promoted it in local authority associations for at least 20 years, as have members of other parties—that will be extremely good news.
	I very much welcome the fact that the Government are finally doing something about pensions, although I worry that they have not met the needs in the first year. As the Minister for Crime Reduction, Policing and Community Safety knows, the Association of Police Authorities estimates the gap to be about £35 million this year, simply because of the 1970s recruiting bulge, which she mentioned, and the fact that those people are now retiring. So, there may be a short-term problem, but at least there is some mechanism for the longer term, which is to be commended.
	We asked in vain for that for very many years under the previous Government. Indeed, I have to say to the hon. Member for Sutton Coldfield (Mr. Mitchell), who talked about micro-management, that I remember the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), as Home Secretary, personally deciding how many police officers we could recruit in the police authorities. He told us whether we were allowed to have one extra police officer for the police authority area. The answer he always gave Avon and Somerset—I know this, because I was the person doing the banging on the desk—was that we were to have no extra police officers. That is why so many of us are extremely dubious indeed about the offers of tens of thousands of police officers that are pouring from the Conservatives.
	We know that when the Conservatives were in office the reality was that the shires did not get extra police officers. [Interruption.] There were a few extra in the Metropolitan police area, but not in the shire authorities, where they were desperately needed.
	I asked the Minister about capital. I do not know whether she yet has an answer and wants to intervene.

Hazel Blears: indicated dissent.

David Heath: No, the Minister will give the answer in her winding-up speech. Unless we have that capital allocation and it is sufficient for needs, there will be a cramping of the style, if I may put it that way, or, more properly, a reduction in the investment, which is needed to make the police service more efficient.
	There will not be a reduction in police numbers because of, first, how chief constables set their priorities, and secondly, the crime fighting fund. However, if we are not careful, police will be put back into jobs that have been civilianised, which is not in the interests of the service. If there is static capital, there will not be the investment in IT that will reduce paperwork to allow police officers on to the streets. There will not be the new police stations that we need or the custody suites, for which I have argued for some time. There will not be what people want in terms of greater visibility in the rural areas and a higher police presence in our cities.
	Furthermore, there will not be innovative schemes such as prolific offender schemes, which have enormous potential but need investment as they are not cheap options, to reduce the worst offending rates in the country. There will not be better drug interdiction, and we shall not continue to bear down on burglaries and car crime. There will not be the extra investment that I want in dealing with domestic violence. There will not be an adequate response to organised crime in the time that it will take to get the Serious Organised Crime Agency up and running and, I hope, doing that job more effectively.
	That is what people expect from the police service. In our debates over recent months, I have come to believe that the Minister shares a lot of my aspirations for the police service and that we want to achieve some of the same ends. This funding proposal is not adequate to that task, but it is not wholly inadequate either.
	We have traded crime statistics, but that turns off the general public no end. They do not want to know that someone says that a certain figure is 23 per cent. while someone else says it is 27 per cent. The individual is either 100 per cent. mugged or 0 per cent. mugged, 100 per cent. burgled or 0 per cent. burgled, and 100 per cent. afraid to go out on to the streets at night or 0 per cent. afraid. That is what matters to people—whether they see the police officers on their streets, able and equipped to do the job, and effective in doing that job. That is what we should be achieving through this settlement.
	One sad thing about the system is that we have only the bald statement of the police grant report, which does not tell us the whole picture. It would be far more useful if that report covered not only the grant given to police authorities, but some of the things that the Minister talked about, such as use of central Home Office funding in support of the fight against crime and the different aspects of capital funding in explicit terms, so that we know what the Government are doing in the round to fight crime. That would make for a much more effective and much more valuable report, which the House could properly debate.
	Although we all have our queries about our own police forces, we also want to know that Terrorism Inc. is being effectively addressed, that communications are being addressed and that British Transport police, which has been mentioned and is one of my hobby horses, has the funds to do its job. If we had all that, we would have a more effective debate and a better idea of exactly what the Home Office is trying to achieve with the considerable funds at its disposal.

Adrian Bailey: I want to reiterate the comments of my west midlands colleagues, including the Opposition spokesman, on the grant given to West Midlands police. Historically, West Midlands police considered themselves underfunded, and there was considerable concern about the potential level of funding in this round of settlements. The outcome was more than satisfactory, and West Midlands police were very appreciative of the recognition given to the historical problems and the funding to address them. The Minister took representations from me and other west midlands MPs, listened to them, and delivered on them.
	There are still concerns about the implementation of the formula. We have quarrels not with the formula as such, but with the speed at which it is reached. The application of the floors and ceilings principle still means that we receive less, shall we say, than our potential funding. I recognise, however, that the increase given to West Midlands police is considerable, that it will help, and that it has been done at the same time as the Minister has managed to achieve growth funding for all other police forces in the country. She deserves commendation on that. On the drive for efficiency in the police force, I am pleased to say that West Midlands police have more than delivered on the previous year's efficiency targets, and have plans to ensure that they conform to the Government's revised efficiency targets.
	Before I make my general points, I want to comment on some aspects of the debate so far. I shall refer to the figures on crime reduction and increased numbers of officers in a moment.
	An interesting difference in philosophy of approach is emerging. The hon. Member for Sutton Coldfield (Mr. Mitchell) commented that he felt that funding should be a block grant to the local police authority—those were more or less the words that he used—and that we should not micro-manage local police forces. To some extent, I agree with him, but a balance must be struck between providing funding to meet the aspirations of local people and micro-management issues.
	The hon. Member for Eddisbury (Mr. O'Brien), who is unfortunately not in his place, complained that policemen were no longer using police notebooks, and that they were looking at e-mails instead. I am sure that the police notebook has a long and honourable tradition in crime fighting in all areas of the country, but I do not see that as a result of any element of micro-management by the Home Office. Obviously, it is a by-product of the changing ways in which local police authorities manage their business. The figures for the west midlands show an increase in the average time that police officers now spend out in the community rather than in their offices dealing with paperwork.
	In terms of perception of crime, the big issue is antisocial behaviour and what we might consider low-level crime. That is uppermost in most people's minds. The partnership approach of the community, local authority and local police is essential in dealing with that. I do not see how that developing approach and change of culture squares with the comments made by the hon. Member for Sutton Coldfield about giving a block grant to the police authority and having no specific grant to realise the particular aspirations of people in local communities.
	As I said, there has been a debate about figures in relation to crime and police. I agree with the hon. Member for Somerton and Frome (Mr. Heath)—I think that I have both the name of his constituency and the pronunciation correct, as I am a fellow west country man—that the bandying around of statistics turns people off. People's experience on the ground is what matters, and I am confident that most people recognise that crime is falling, although violent crime is an issue.
	On local delivery, I have received the latest figures from the Safer Sandwell partnership in my locality. I shall not go through all of those figures, but all the key indicators are down, and total crime is down. I accept that antisocial behaviour is still a huge issue in my constituency, but the number of police officers and community support officers in the area has increased, and that is recognised. The crime fighting fund has been a valued part of Home Office funding and is much appreciated by local police forces and the people it serves.
	I also welcome the money allocated to expand the role of community support officers, who are playing an essential part in changing people's perception of crime and in giving them confidence to deal with it. I understand from my local police force, who were initially sceptical of the role of community support officers, that they are now totally convinced about their role in the local community. They say that they provide valuable local intelligence, which aids police officers; a visible presence, which reassures the law-abiding citizens in the area and deters those who are not law-abiding; and that they are working well with the police, local communities and the local authority to provide support for local citizens in their battle against antisocial behaviour.
	On the Home Office's Together programme, Sandwell is one of the pilot local authorities, and two of my local residents, Carol Sutton and Evelyn Lissemore, recently received a Home office award for their work in combating antisocial behaviour in the community. I have visited Carol Sutton, and had a meeting with her, the police and the local authority antisocial behaviour unit. From that discussion, I have identified a range of issues that need to be taken forward by the Home Office in helping our fight against antisocial behaviour.
	A couple of things above all have arisen from the project. First, it has given local people the confidence to take on those who are destroying the quality of life of others in their neighbourhood. Secondly, people see that if they take action, it will get support and be publicly recognised. I commend the Home Office on pursuing that approach, and I hope that, as those projects produce results, further funding will be provided. Above all, by involving local representatives, information is obtained that I and others can feed into the Home Office to ensure that antisocial behaviour legislation and funding priorities are more specific and better geared to delivering the outcomes that we want.
	Let me end by saying first, that we are grateful for the extra funds, and secondly, that in the Sandwell area and in the west midlands we recognise the value of partnership working and the specific grants and funding streams that make it possible. We are confident that although there is still a huge job to be done, the Government are moving in the right direction, and we will build on the progress that we have made today.

John Horam: I want to speak briefly on behalf of what I call the leafy suburbs and the fringe rural areas of London. When I make such points, as I do quite often, I usually get a weary smile from the Minister or representative of the Metropolitan police to whom I am talking. I confess that I could never accuse this Minister of a weary smile, but I tend to get that reaction from some of her bosses. They trot out a number of statistics and then say "The statistics are not too bad, so what are you complaining about?"
	This is the sort of thing about which I am complaining. I recently received a letter from a constituent who wrote:
	"I have been the subject of several rather nasty burglaries recently as well as acts of vandalism, however the real problem we are having is the police response time, and the Police just not knowing where Tripes Farm is, with the Police phoning up as to enquire where we are. All of this is just not good enough, we have 12 or so businesses here with 30 or so people employed, all pay business rates and for what? The Police service that we receive is truly wanting, and is the worst I have ever known since I started farming here"—
	there are farms in Orpington—
	"in 1966 . . . Just to rub salt in, my young manager who was called out to the farm before me last night, to attend the break in and help secure the premises, was stopped on his way home by the police last night and asked where had he been!"
	Another letter says:
	"I have recently experienced teenage youths throwing bottles, tin cans and other refuse at my front door.
	On the 27th December I dialled 999 to contact the police because, following one of these incidents, the youths were standing at the corner . . . taunting me to chase them. The police did not respond to my call and I had no acknowledgment from them to say they were aware of my call.
	The same thing occurred last night, again the police did not respond and I received no acknowledgement of my call.
	Today I decided to make a complaint to the police regarding this situation. I have just spoken to a lady who works at the CAD Office at Orpington Police Station and she has advised me that there are not enough police officers on patrol in the Borough of Bromley to respond to emergency calls never mind the 'as soon as possible' calls that my call is classified as. She also advised that other residents . . . are suffering the same disturbances as me, but the police are unable to act because of lack of manpower."
	In an e-mail, another constituent wrote:
	"Last night a number of homes in Farnborough Park were broken into, including ours, stolen from and vandalised . . . when we reported it, an hour later my wife and I both received 'courtesy' phone calls to tell us that the police were busy and couldn't tell us when they could come . . . When I probed further I was told that they had many, many burglaries last night and there were only fourteen units to deal with them."
	That is the day-to-day situation reported to me by my constituents in Orpington. The reason is not that the local police are bad. Inspector Nick Stratford, the commander in my section of Bromley, is an admirable officer. He has been there for 18 months and has had a considerable number of successes. His staff also work extremely hard. The problem is simply that there are not enough of them. Bromley has 470 police officers; nearby Lewisham has 639; and Croydon next door has 685. We have 169 fewer than Lewisham, which is a smaller borough, and 215 fewer than Croydon, which is also a smaller borough. Bromley is the largest borough in London and has problems associated with that.
	As a consequence of those numbers, Orpington has only 22 sector police officers, three sergeants and 13 community support officers. Of course there is a response element as well, dealing with 999 calls, but none of that is enough to constitute a proper neighbourhood policing policy, which I accept is the Government's aim. In only three wards—Biggin Hill, Cray Valley East and Orpington and Ramsden—do we have a proper set-up. In wards such as Petts Wood and Knoll, Farnborough and Crofton, Chelsfield and Pratts Bottom and in other rural areas we simply do not have enough officers. Each of those wards—quite big wards of 12,000 people—has only one ward officer. Incidentally, I found one of them at the end of a corridor in the House of Commons defending us against the sort of vandalism that occurred recently. Abstracting officers in the circumstances that I have described makes the situation even worse: it really is not good enough.
	I accept that the Government have given London a more generous settlement this year than they have in the past. As the Minister said, it is 5.8 per cent. against an average of 4.8 per cent., and obviously I welcome that. The problem is that the resource allocation formula in London does not work favourably in the case of outer London boroughs and severely disadvantages boroughs such as mine. The Metropolitan Police Authority acknowledges that. I accept that it is not the Minister's responsibility to deal with that matter. None the less, it is a problem.
	As the hon. Member for Somerton and Frome (Mr. Heath) said, most of the increase in police force has been due to increases in council tax. The number of police officers in Bromley—470—is no greater than it was in 1997. There was a dip after that and we have now finally got back to the 1997 figure. My constituents pay considerably more council tax, particularly to the Mayor of London, whom by and large those in the borough of Bromley did not elect, and they have no more police to show for it. It adds insult to injury that they have higher crime rates, more antisocial behaviour—

Kevan Jones: Will the hon. Gentleman give way?

John Horam: I cannot because of the time limit.
	My constituents face more antisocial behaviour and have no more police than they had seven years ago, but pay substantially higher council tax to the Mayor of London. That is totally unacceptable and I shall continue to bang on about it until something is done.
	3.36 pm

Roger Gale: The Minister has effectively made my declaration of interests for me, for which I am grateful. As she knows, I am proud to hold the warrant as a special constable with the British Transport police. I am grateful to her for recognising the BTP, and to the Home Office, I hope, for beginning to recognise the force's needs in terms of infrastructure.
	The British Transport police do not, of course, feature in the police grant report because they are not funded by the Home Office. It seems extraordinary—I emphasise that I am now speaking as a Member of Parliament and not as a representative of the British Transport police; I am certainly not speaking for the chief constable, who may or may not share my view—that we rely on the train operating companies to fund the British Transport police. The funding is often in arrears. It is a little like saying that the City of London should fund the fraud squad.
	The British transport police are responsible for the policing of every inch of track in the United Kingdom and need to be funded and resourced properly and accordingly. As the Minister knows, because I have said it before, at any one time there are only 200 pairs of British Transport police officers on duty to cover not only the whole of the track, but railway land and property throughout the country. It is an impossible task. When people say, "There is vandalism and antisocial behaviour on our trains, so why isn't anyone there?", the answer is that there are not enough people. I would not wish to exonerate the train operating companies from their responsibility to provide properly trained staff on the trains—the conductors and the guards—but that should be over and above the work of the British Transport police.
	We are here, however, to debate what is in the police grant report, not what is not. Let us come down to hard cash. The Minister knows that 85 per cent. of the money that is spent upon the police is spent on staff salaries, which does not leave a huge amount of boodle to spend on information technology equipment, cars and all the other things that the police require. That is not 85 per cent. on policemen. Under the Government, staffing has risen. Part of that is due to the privatisation, the civilianisation, of police tasks. I have no problem whatever, particularly with my constable's hat on, in seeing clerks doing the secretarial work that needs to be done to back up the men and women out on the beat. It is an entirely proper function, but I take issue with the amount of bureaucracy that is required of our policemen and women at virtually any hour of the day or night.
	It is said that police numbers have increased. [Interruption.] The Minister says from a sedentary position that that is true.

Hazel Blears: indicated assent.

Roger Gale: The number of size 10 boots on the beat hour by hour, day by day, has not increased. The number of hours the police spend sitting on their backsides on swivel chairs in offices filling in forms might have increased, but that is not what the man on Margate seafront or the lady in Herne Bay high street want. They want those size 10 boots out there and those mark 1 policemen's eyes on the streets, doing the job that they are trained very well to do. They do not want them to spend seven minutes standing on a street corner filling in a stop form.
	If I, as a policeman, were to stop six people, I would have to spend some 45 minutes filling in forms. [Interruption.] The Minister shakes her head, but only a couple of months ago, the previous Home Secretary sat roughly where she is sitting and said, "I have done this." For obvious reasons—I make no disparaging remark in pointing this out—he had it done for him, but the fact remains that he dictated the responses and somebody wrote them down. But he did so sitting at a desk, not on a wet November night on a platform at King's Cross station, or in Margate high street. There is all the difference in the world between those situations.
	Highly trained police officers are now being required to handle—with the back-up of armies of civilians—targets, surveys and audits until they are coming out of their ears. The Home Office has quite properly laid some emphasis on "criminals brought to justice", for which we now have targets. Is that not what the police are for? Do we not want criminals to be brought to justice? Yes, but what qualifies as a criminal brought to justice? Conviction and sentence? No. The answer is: caution, or conviction and sentence. So let us assume that I am a reasonably senior police officer who wants to hit his target for "criminals brought to justice". I say to my boys and girls, "Go out there, grab people off the streets and get 'em cautioned." A caution is a conviction—a "criminal brought to justice". It is a police record—fingerprinted and perhaps DNA-tested—that counts towards my target, but it does not make the public feel much safer. It is much easier than spending five hours filling in forms, case-building, taking a criminal to court and spending the day in court, only to watch someone let him go whistling down the street with a five-shilling fine; however, it does not do the job.
	I know that the Minister takes these things seriously, but I should point out that this target—it is just one of many—is not working and will not work. Because the Home Secretary wants results, the figures are being manipulated. I know that not from any officer in the British Transport police or—I should hasten to add—in the Kent police, but from a very senior police officer to whom I spoke only a couple of days ago about this very subject. So I would be extremely cautious about these massaged figures.
	I turn finally to the local issues facing Kent. Kent's police are underfunded. As my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) and the hon. Member for Somerton and Frome (Mr. Heath) both pointed out, these new policemen are paid for not by the Home Office—let us get that idea out of our heads—but by the county's ratepayers. The money is coming from the precept—the rates. Our policemen are trying to police the front-line roads into the United Kingdom from the UK's major ports, through which come most of the people from mainland Europe. They are also trying to police the channel tunnel and Kent's airfields, and to deal with the problem—and it is a problem—posed by asylum seekers. None of that is satisfactorily taken into account in the formula on which the police grant is based. I think that Kent is being short changed.
	I want to ask the Minister three specific questions. First, who is going to pay for the additional policing that will inevitably arise as a result of the introduction of the provisions of the Licensing Act 2003? Who is going to pay for the extra coppers? As an aside, will the Minister either tell me or find out from the Lord Chancellor what has happened to the millions of pounds that were paid to the licensing magistrates for a job that is now being done by the local authority? It seems to me that millions of pounds have just disappeared into thin air. If I am right, let us give that money to the police and contribute towards the cost of what many people regard as a lunatic piece of legislation.
	Secondly, will the Minister tell me when Kent will receive the £14.8 million still outstanding from the Home Office in respect of the cost of looking after asylum seekers? The leader of Kent county council, Sir Sandy Bruce-Lockhart, wrote to the Home Secretary on 24 January about that money, which has been outstanding for two years. Kent has to set its budget on 7 February, so please can we have that £14.8 million owed to us? If the Minister can persuade the Home Secretary to be really generous, perhaps we can have the interest on it, too.
	Finally, the Minister referred in her opening remarks to delegated training. I have no particular problem with the concept of delegating training to the county forces, but if we are going to do that, are we delegating the costs as well? Will the county force now pay for the training that used to be provided centrally, or will some of the centrally provided money follow the coppers to the county force for training? That is clearly an important matter. If the Minister answers those three questions, I will probably be a happy man.

Parmjit Dhanda: I was not initially planning to speak, but I should like to make a couple of points in response to what the hon. Member for North Thanet (Mr. Gale) said about licensing. I disagree with his general comments about that subject, because police officers in Gloucester, particularly in the Gloucester and Forest division, told me that it was good not to have so many people coming out of the pubs on to the streets at 11 o'clock, which causes so many problems for the police on Friday and Saturday nights.
	Police officers are, however, discussing the issue of when the new licensing laws should apply. The culture in this country is not the same as on the continent, and the rightness of bringing the new licensing laws into force just before Christmas was certainly debated by police officers in my constituency. They took the view that the culture would not have seeped in by that time and that people would not have been sufficiently used to it. The police feared that implementing a radical change around November could bring them additional problems with binge drinking late into the night, particularly around Christmas time. Perhaps the Minister can provide some comfort for the officers who brought up that matter.
	Our debate today is focused on settlements. In Gloucestershire, the settlement was 3.77 per cent. Obviously, we would have liked more. At the same time, officers told me that they had achieved record reductions in crime—particularly in burglary, but in many other respects, too—over the past 12 months. They managed to achieve great things, despite the fact that, historically, Gloucestershire has not been the best funded area. To do that, the police had to look into how they cut their cloth and they had to modernise and innovate.
	There are 61 community support officers in the county, 18 of them in my constituency. Another seven or eight are due to join shortly, with more to follow—up to about 25 such officers in all. However, 31 of the 61 were funded above and beyond the match funding figure. Achieved through additional resources within the county, that has made a huge difference on the streets. I heard what the hon. Member for North Thanet said about having size 10s on the street, but we need to include size 7s and 6s as well.

Hazel Blears: And even smaller.

Parmjit Dhanda: Yes, and as the Minister would agree, we are not just talking about the size of the men, either. Many more women are now PCSOs, just as there are more female Labour Members in this House.
	My local constabulary has taken other measures as well. It has civilianised the custody detention officers, which has meant that 17 more police officers are able to go out on the streets.
	There is another important aspect to funding formulas. My constituency of Gloucester is an urban area in a rural county. It has pockets of real deprivation, which present tough challenges to the police. In Gloucestershire, Cheltenham and Gloucester—the latter in particular, and disproportionately—need additional policing resources. I urge Ministers to consider the problem in the longer term, to determine how to tackle problems arising in urban communities in largely rural areas.
	On top of the match funding procedure and the work to bring in additional resources through innovation, the rural police fund and the crime fighting fund have allowed us to build a force of more than 1,000 constables over the past few years. With more than 1,200 officers in total, the Gloucestershire force has never been so large in all its history.
	Another aspect is the capital spending that is taking place. Our police headquarters was always a rather dilapidated building in Cheltenham, but that is being sold and a new, state-of-the-art building is being erected in my constituency, at a cost of £25 million. A shortfall of a couple of million pounds in private finance initiative credits has been made up by my hon. Friend the Minister, which goes to show that the Government have facilitated the building of new police headquarters, just as they have made it possible to build more than a 100 new hospitals around the country.

David Heath: Will the hon. Gentleman give way?

Parmjit Dhanda: I would give way to the hon. Gentleman, but other hon. Members want to speak and I am nearing the end of my remarks. I am sure that he will have plenty of opportunities to contribute again this afternoon.
	I urge the Minister to take account of the need of urban constituencies in rural areas when the amount of funding is being calculated. I also hope that she will take into consideration those forces like my own that have brought in innovations. However, I remind the House that funding settlements are not the only important element, as another key consideration is the future capital investment in bricks and mortar.

Nigel Waterson: I am delighted to contribute to this debate, not least because crime and antisocial behaviour are currently at the top of my constituents' priorities.
	Next year's budget for Sussex police will be set next week, and it is likely that council taxes will have to rise by just under 5 per cent. That is within the Government guidelines, and I am told that the new budget will fund an extra officer in each of the county's 43 neighbourhood police teams. It should also enable Sussex police to recruit and train PCSOs, of whom we now have 200. That is more than any other county force.
	It is also hoped that efficiency savings next year will amount to £6.9 million. If the Sussex force can pull that off, it will be pretty impressive. The intention is that the money will be ploughed back into front-line policing, so it is clear that the Sussex force is doing its best with the available resources.
	Sussex has the fifth lowest council tax of all shire police authorities, but it is interesting that the net revenue spending on policing per 1,000 head of population is 3 per cent. below the shire average at £145,900. It is substantially below the average for all of England and Wales, which is nearly £183,000. There is some way to go in squeezing more funding from central Government.
	Funding for the coming year is critically dependent on the level of the grant floor. We hear a lot about grant floors, and I suspect that we shall hear even more in the next debate. That is determined by the Government and cannot be forecast from one year to another with any certainty, because it is a purely political judgment. Hon. Members have already made the point about long-term planning for police budgets.
	Sussex is on track to have made £28 million of efficiency savings since 1999, so it is not an inefficient police authority by any stretch of the imagination. However—my hon. Friend the Member for North Thanet (Mr. Gale) made a similar point—the salaries of officers in Sussex account for nearly 80 per cent. of the entire budget, so the available headroom for making other major policing choices is very restricted.
	On one level, I am pleased that police numbers overall are back to the sort of levels we had in 1997, although other problems exist. When I was out with the police in Eastbourne the other night, I was told that some 60 per cent. of officers deployed on any day are probationers. At some time in the future, that may be good news for the force, but it suggests that a raft of senior officers has chosen to leave policing, perhaps because of extra bureaucracy and red tape.
	Police numbers in my constituency are well below the national average. If officers deployed at Gatwick are excluded, the ratio of population to police officers in Sussex is about 509 people to each police officer. Sussex would need to recruit more than 300 additional officers just to reach the shire average of 461. There is some way to go in obtaining a level of policing that is remotely applicable to the population of the county.
	I am pleased to say that the force's overall crime detection rate has edged back up to more than 25 per cent., but that must be put in the context that it leaves 75 per cent. of crimes not detected. Such matters must be seen against an increase in recorded crime of 6.5 per cent. or 8,635 offences in 2004. The Minister may be able to say how that compares with similar counties, but it is interesting that most of the increase is in crimes such as common assault and criminal damage. I accept that some of it may result from the way in which we now record crime.
	I said that I went out with my local police the other night, which I try to do from time to time because I find it instructive. It was particularly interesting because it was the Friday before the Second Reading vote on identity cards. To a man and woman, all the police officers I spoke to were in favour of identity cards to help them in their job. I was out with the police during Operation Merlin and they stopped more than 200 vehicles, partly because they were looking for drink drivers and partly for other reasons, including in particular a local phenomenon called boy racers. It was interesting to see how long it sometimes took to check people's identities, and some refused to give any clue as to who they were and where they came from. The basic mechanics of checking people's identities in day-to-day policing should be considerably enhanced by identity cards, despite the legitimate concerns about the way in which the Government have chosen to introduce them.
	I was struck, as I always am, by the dedication and professionalism of the officers I was with on that Friday night. They are lucky in my constituency to be led by Chief Inspector Peter Mills, who is a no-nonsense, experienced police officer and determined to adopt a zero tolerance approach to crime at all levels. As I have said, it was somewhat surprising that 60 per cent. or so of the officers were probationers, which seems to be the trend at the moment.
	Another factor when we are looking at police numbers versus the challenges that they face—they certainly face challenges, even in places such as Eastbourne—is the extent to which their hands are tied behind their backs by red tape and form filling. As I understand it, the police have to take account of 58 separate performance criteria. Sir Ian Blair, the new Metropolitan Police Commissioner, has said that the obsession with officer numbers and other targets is "a weight" holding down the police. Perhaps the most obvious example is the new requirement, which I believe comes in on 1 April, to record police stops as well as searches. The extent of form filling was graphically set out by my hon. Friend the Member for North Thanet. We have made it clear that on the first day of a Conservative Government that form filling would be stopped.
	There is a problem with the amount of time that police take up with the administrative side of their job. There are also new pressures on them all the time. Those include the relaxation of the laws on so-called soft drugs such as cannabis. There is also the massive problem, which has been so prominent recently, of 24-hour licensing. It is a matter of real concern in my constituency, particularly for people who live in the centre of Eastbourne, who already face major problems, especially on Friday and Saturday nights. It is also a problem for the police, who will have to live with the new rules. My police are certainly apprehensive about how they will manage.
	There are other factors, too. The other day, the chairman of the police authority, Mark Dunn, wrote to the Home Secretary, expressing what he called his "grave concerns". He said:
	"The implications for Police Forces in terms of additional workload are significant and officers will have to be diverted from other policing priorities and activities to undertake enforcement activity against those who are drunk and disorderly.
	If drinking establishments were allowed to open until three or four in the morning the police would have to take officers off day shifts in order to do their job effectively at night."
	He went on to make a point that I had not heard before in this debate, which is that he worries about recruiting police officers and the difficulty of attracting
	"young people to a career which fundamentally involves policing anti-social, violent binge drinkers."
	He makes a very good point.
	It seems to me that the choice is clear. At the moment we have a regime in which a burglar has a three in 100 chance of being caught, charged and convicted, and even if he goes to prison he may well benefit from the early release scheme and go on to commit yet more burglaries. The Liberal Democrats, of course, take the view that burglars should not go to prison anyway. We are offering a leader who, as Home Secretary, reduced crime by 18 per cent., and we are saying that we will have 900 extra police officers on the streets of Sussex.

Elfyn Llwyd: Hitherto this has been an interesting debate. It is normally characterised as an annual dose of special pleading, but that is the nature of things. Somebody referred earlier to groundhog day, but this is the system that we operate—the annual special pleading system. Like many other hon. Members, I believe that there has to be a different way of allocating police funds. We urgently need a root-and-branch overhaul of the formula. The Government tell us that that is ongoing, but we have been told that for some considerable time, and I hope that, at some point, the Minister will tell us when it is likely to be completed. The debates will be characterised by this sort of horse-trading until we have an equitable distribution of funds.
	I welcome what the Minister said about the possibility of a three-year funding arrangement, which would undoubtedly be good for forward planning. One of the problems at the moment is stop-go planning. Another problem, in Wales in particular, is the extra cost of policing rural areas. To their credit, the Government accepted the case made by many Members, including myself, for a rural policing fund. That was three years ago, and the money has been paid out at the exact same rate for three years, despite inflationary pressure.
	Having accepted the argument, the Government seem to be back-pedalling on the rural policing fund this year. That is a cause for concern, because of increased fuel costs, high-mileage vehicles needing high maintenance, huge hikes in insurance costs since 9/11, and the need to tackle increasing property crime in hitherto fairly safe rural areas. The scourge of drug peddling is now as much an issue in rural areas as it is an inner-city phenomenon. That places further pressure on good rural policing.
	Dare I say that if the Hunting Act 2004 is implemented, it will impose a further huge commitment on rural police forces? My understanding is that the Home Office has not included a budget head for the vast burden that may fall on rural police forces—in Welsh terms, all four forces. Do the Government recognise the burden that the Act will place on police forces? If so, why has this item been so studiously ignored?
	The four Welsh police forces are performing well and stand comparison with the best in England and Scotland. North Wales police received a green grading, the highest available, from the Audit Commission for crime recording. They have reduced crime by 10 per cent., one of the best results in England and Wales. There were 4,600 fewer victims of crime in North Wales in 2004 than in the previous year. The overall detection rate was extremely good, among the best in England and Wales, at 41 per cent., apart from Dyfed-Powys, where it was even better. The western division—that is, Gwynedd and Ynys Môn—had, at 48 per cent., the highest detection rate of all the 255 police divisions of England and Wales. For burglaries of dwellings, all three divisions were in the top five. Robbery in North Wales was down by 28 per cent., and so on.
	The police force is performing well in North Wales, Dyfed-Powys, Gwent and South Wales. The Minister may laugh and say, "So why are you whingeing?" I am whingeing because I want the police to continue doingthat good work. Despite budgetary pressure, Dyfed-Powys is opening up police points in shops, chemists and post offices, often helping to keep those post offices open, which the Government are not keen on. The force is doing an excellent job and adopting a creative approach.
	On the overall funding of Welsh forces, they are all on the floor at 3.75 per cent., compared with English forces, including the Met, at 4.85 per cent. That is quite a difference. We know that police inflation remains between 5 and 6 per cent., of which pensions account for 1 to 2 per cent. Forces are therefore making cuts, mainly in capital investment projects initially. The North Wales police force has to make cuts of about £500,000 because of the settlement. Specifically, I am told, that means police stuck in the station far more often, as the force will not be able to invest in mobile technology such as hand-held devices. The cuts will also lead to what the force calls a tightening of the recruitment freeze. I assume that means a longer than expected period during which no new police officers will be recruited. That cannot continue ad infinitum, because of the working of the crime fighting fund. Clearly, there is a problem.
	The force says that the review of the formula needs to be completed quickly, taking full account of sparsity issues. The sparsity grant has not kept pace with inflation and requires more research. The funding and tax base of forces must be protected if the drive for improving performance is to be sustained in North Wales.
	The South Wales police tell me that their main concern is that the funding formula is based on population census figures, which works against all four forces. As the census figures show the Welsh population to be significantly reduced, that may have a major impact on the force's finances. It is having to cut capital projects because of the funding changes. As a result, developments at its headquarters at Bridgend are probably under threat. Bill Wilkinson, of South Yorkshire police, who is a member of the Home Office expenditure forecast working group, says that the cost and service development requirements need a 6 per cent. growth in budget.
	Dyfed-Powys police also have cost pressures, with growth in pension costs of £1.8 million and pay inflation of £2.1 million, so costs will rise by about 7 per cent., and as we know, they have also had the 3.7 per cent. flooring. As I said earlier, the force is innovative. It does not waste any money. It is considering further developing Airwave, the communications centre, the rural post office scheme, to which I referred, criminal justice measures, the successful automatic number plate recognition system, about which the Minister will know, and police officer training at a cost of £500,000. All that is sensible expenditure. On the other side of the equation are pensions, £1.8 million; inflation in doctors' fees, £200,000; energy cost increases, £200,000; crime recording, £100,000; general pay price inflation, £2.1 million; and other costs, £500,000. The force is very concerned. Unlike some hon. Members who have spoken, I am not jumping for joy at the moment, because of those pressures. The force highlights the number of problems in the budget formula, and I have referred to the population falls and the use of out-of-date census figures, about which it is particularly concerned.
	Given the remarkable number of Home Office Bills in the Queen's Speech, there will undoubtedly be huge further pressures on police forces. If the Home Office continues to issue diktats from the centre for this, that and the next thing to be done, I hope that it realises that the additional responsibilities will have to be paid for. Without that, they will not become any kind of reality. The terrorism argument is another that one could consider. There are many pressures. The Serious Organised Crime and Police Bill will put great pressure on the average police force, despite the funding of the new Serious Organised Crime Agency—of that I am sure.
	I conclude in the same way as the hon. Member for North Thanet (Mr. Gale) by asking a few questions to which I hope the Minister will be able to reply in due course; if not today, I would respectfully ask her to write to me in the course of time—not in a too lengthy course of time perhaps, but in the course of time none the less.
	When will the review of the police grant formula be completed, and will the Minister confirm that the police sparsity grant has not kept pace with inflation over the past seven years? Has she used the 2001 census figures for the 2005–06 police grant calculation? What figures has the Home Office used to calculate the day visitor element of the 2005–06 police grant? Finally, what are the most recent figures available for measuring the number of day visitors to Wales for the purposes of the allocation of the police grant? I do not expect those questions to be answered today, but I would be greatly obliged if she would respond to each and every one of those points in due course.
	This is not a very good settlement for any of the Welsh police forces. They had expected worse, but I am reminded of what my dentist says: when one deals with Government, they start by threatening to amputate both legs, and when one loses only one, one feels rather happier about it.

John Wilkinson: May I at the outset express my appreciation, as a resident in London, of the excellent service leadership given by the former Metropolitan Police Commissioner, Sir John Stevens, whom I got to know during the parliamentary police service scheme—a scheme that I would recommend most warmly to Members—and say what a fine example he gave, and how pleased I am that he has received a peerage? I am encouraged by the initial step taken by his successor, Sir Ian Blair, in declaring unequivocally that he is not prepared to tolerate the use of soft drugs for so-called recreational purposes. The drugs problem is at the heart of so much of the criminality in London that I am glad that he is placing the emphasis on tackling it and making no serious distinction between soft and hard. We all realise that the misuse of substances and soft drugs leads ultimately to the use of hard drugs. The effect on personality and health of the use of soft drugs is a grave phenomenon.
	Sir John Stevens and the Metropolitan Police Authority, as well as representatives from my own borough and others, may have argued for a generous settlement for the Metropolitan police—I think that 5.8 per cent. from the Home Office is all to the good—but as my hon. Friend the Member for Orpington (Mr. Horam), who represents a constituency not so different from mine—albeit that it is at the other extremity of the capital—pointed out, citizens in the capital do not see the direct benefit in policing terms of the huge extra taxes that they are paying for the police. I refer especially to local taxes and the 49 per cent. that is raised through local taxation. Of course, the precept in London is particularly severe, inasmuch as we have to pay for the Mayor's extravagances as well.
	I referred to the fact that drug-related offences are such a serious phenomenon in the capital. I find it perverse that the Government should have made it more difficult for police officers to stop and search individuals in the street on grounds of suspicion. It is not only gun crime that is increasing. More and more young people carry knives and are prepared to use them, and there is also a continuing terrorist threat. In those circumstances, the suggestion that the police should have a disincentive to stop and search on the ground of suspicion—that disincentive being all the form filling and reporting that they will now have to carry out—is woefully misguided. I hope that the Government will reconsider their policy on this matter.

Roger Gale: It is not only a matter of stopping and searching. The stop and search form has been around for a long time, but if a constable stops anybody at all in virtually any circumstances, they will now have to fill in a form. As my hon. Friend says, that is a huge disincentive.

John Wilkinson: I am grateful to my hon. Friend, who speaks with professional experience in these matters.
	We must also consider these matters in the context of antisocial behaviour—the plague that bedevils so many of our communities. Here again, the ability of police officers to stop young people, caution them and see whether they have broken bottles or indeed knives hidden about their persons is an important operational capability that is being made less likely to be used by the policy adopted by Her Majesty's Government.
	What really concerns me is that the police service should be able to attract personnel of the highest quality. I was impressed by the men and women, including civilian support personnel, whom I met during my attachment earlier in this Parliament to the Metropolitan police, but I think that we need a fairly radical personnel policy to encourage high flyers, stimulate leadership and offer a more flexible career pattern than is offered at present. The Government have embarked on the recruitment of large numbers of community support officers, and they are welcome as far as they go. Their powers are limited, particularly in the field of arrest, and rightly so in view of the relatively limited training that they receive.
	I would advocate the reinstitution of cadet college training of the kind that used to exist at Hendon in the old days. Older members of the service say that graduates of the police cadet college had discipline and a commitment to the service, and that they exercised leadership throughout the force that exceeded the influence that one might expect given that relatively few enjoyed that excellent training. We should start a scheme of that kind again. I know that the police service is attracting graduates, which is welcome, and that they go on the beat like everyone else, but a police academy could provide a worthwhile long period of indoctrination to instil in people the ethos, discipline and concepts of modern policing.
	I also suggest that we should have police reservist personnel. A flexible career structure would mean that people might feel that they wished to enter other walks of life. If the pension system were modified so that it became fully portable and funded so that the cost to the Exchequer were reduced, individuals could spend a few years in the police service before going off into other careers. As with the Territorial Army, the Royal Auxiliary Air Force and the Royal Naval Reserve, such people could continue to exercise the full capabilities of their training in an operational capacity. They could be used at weekends, or times of emergency, specific difficulties or a terrorist threat—whenever that might be. Such a structure would add to the spectrum of capabilities in the police service, but we have utilised it to date only in Northern Ireland. The system worked extremely well there so we should implement it in our police forces, perhaps starting with the Metropolitan police.
	If the system were to be successful, the regulars—the long-term careerists—would need to regard reservists as equal partners in the task of policing. Reservists would have had more training than specials, who have a valuable role, as exemplified by that performed by my hon. Friend the Member for North Thanet (Mr. Gale) on behalf of the British Transport police. However, specials, like CSOs, have limited functions, but reservist police personnel could fulfil all functions because they would have the same training and background as their counterparts in the regular force. They should be paid at the full rate for the rank that they exercise while on duty. Such a system would require an imaginative approach, and I am sure that a change to pension arrangements would be necessary. I would be interested to hear the Minister's plans for the future of the police service pension scheme because we need more precision and detail than she was able to spell out in the limited time available earlier.
	May I stress a couple of points that have been brought home to me by the admirable performance of the local chief inspector in Hillingdon, Mark Toland, who has tried to increase police presence on the ground—not only on the beat—by keeping police stations open for longer? That is important because there should be the footprint of police stations to which the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) referred in his eloquent and well-informed speech. It is important for the general public to be able to see a uniformed officer. They should be seen not by a volunteer—volunteers do a wonderful job, as do civilian personnel such as clerks, typists and administrators—but by a fully trained policeman. If the career pattern were radically changed, reservists or older officers could do that job. I suggest that officers should be able to serve for longer if they remain fit and motivated so that relatively sedentary tasks can be fulfilled by people with real operational experience and an understanding of how to relate to the general public.
	Neighbourhood policing is going fairly well, but there is an awfully long way to go. Unless we adopt the radical personnel policies that I have adumbrated, or something of the kind, I cannot see that it will be possible easily to provide the extra manpower that is needed. My party is committed to providing 40,000 extra police. That is a wonderful commitment that will, I am sure, have the support of many people up and down the country. In making it, however, I ask my hon. Friends to consider the reservist concept to determine whether, in their judgment, it makes sense, and to think about allowing police officers who are fit and motivated to serve for longer.
	The career development of police personnel must continue throughout their careers. Bramshill police college is instrumental in that purpose, and it is an admirable institution. However, I suggest that senior reservist police personnel should also be enabled to attend courses there when they reach the higher ranks, and likewise that reservist personnel should be able to go to Hendon cadet college for refresher training to keep them up to date.
	There are many measures that we can pursue. I am sure that under the capable stewardship of my party, and with the ideas that my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) put forward in his excellent speech, the British public can have hope and confidence that the police service will be as good in future as it used to be in the past when we had a Tory Administration.

Hazel Blears: We have had an extremely interesting debate with some very good contributions that have given me a great deal to think about. I will do my best to answer as many questions as I can. There may be one or two technical issues on which I shall need to write to Members, and I undertake to do so.
	I welcome the thoughtful speech by my hon. Friend the Member for Manchester, Central (Tony Lloyd), who raised specific issues relating to Greater Manchester police, which is of course my own police force, and talked about gun crime. That is an indication of how wide-ranging the debate has been. We have dealt not only with the purely financial aspects but with some of the serious challenges facing our police services and the ways in which they operate.
	My hon. Friend the Member for Manchester, Central responded to comments by the hon. Member for Sutton Coldfield (Mr. Mitchell) by discussing the serious problem of gun crime, particularly in his constituency. It is true that gun crime is concentrated in the major conurbations of Liverpool, Manchester, London, Birmingham and Nottingham. It is also true that it increased quite dramatically a couple of years ago, but I am pleased to be able to tell the House that that increase has slowed down equally dramatically as a result of some very effective policing in the shape of Operation Trident in London and Operation Stealth in the west midlands and our introduction of the mandatory five-year sentence for anybody caught carrying a gun. As my hon. Friend pointed out, this is not simply a matter of policing but of working with communities to challenge the culture that says it is cool for young people to carry guns and that it is an appropriate way of dealing with conflict in our communities. Clearly, it is not. Our work with Mothers Against Guns and other groups across the country is helping to bring gun crime down.
	My hon. Friend talked about pensions. Like many other forces, Greater Manchester faces more pressures in that regard this year than in previous years. He welcomed the Government's proposals to smooth out volatility as well as the extra contribution that we have put in to meet pension requirements this year.
	My hon. Friend mentioned the crime fighting fund and suggested that Greater Manchester police force will be penalised as a result of the recruitment that it has undertaken. I should point out that police numbers in Greater Manchester have increased massively—we have 1,139 more police officers than we had in March 1997, and I can say from personal experience that they are very much on the front line and reassuring people in communities. The performance of Greater Manchester police, especially since the appointment of the new chief constable, Mike Todd, has improved significantly and I am delighted that they do such a good job.
	However, it is important that the record numbers of police officers remain in place and able to police on behalf of our communities. Several hon. Members said that they believe that the local precept has supported the increase in police numbers. It is important to put the record straight. Police officer numbers have increased by 12,570 since March 1997. Of those, 9,650 are funded through the crime fighting fund—specific investment by the Government—and approximately 3,000 are funded locally. Local people have made a contribution towards the number of police officers because they view that as a priority for their communities, but I stress that 9,650 have been funded through the crime fighting fund and we should acknowledge that the Government's policy decision that we needed more police officers on our streets led to the record numbers.
	I shall deal with the speech of the hon. Member for Sutton Coldfield towards the end of my remarks—I shall certainly have something to say about his promises to the country.
	The hon. Member for Somerton and Frome (Mr. Heath) made an interesting contribution. His party wants to do away with the council tax and allow local authorities to tax people's incomes. Doubtless that will be the subject of much debate, to which we greatly look forward. Local people will have a view about that, especially about those who might end up paying little and others who would be significant losers under Liberal Democrat proposals.
	I am grateful to the hon. Gentleman for his acknowledgement of the Government's investment in policing and his welcome for increased police officer numbers. He complained about the lack of police in rural areas and made an interesting proposition. I am not sure whether he meant that people who could pay a little more through their rates should have more police. I was worried that, in that case, people in poorer areas might have fewer police on their streets. We need to have that position clarified.
	The hon. Gentleman used a word that could mean all things to all people when he said that he intended to have "equalisation." I wonder how directing resources together with equalisation would work out. The arithmetic would be fascinating.

David Heath: I do not propose to give the Minister a seminar on our proposals. However, people would like a minimum policing guarantee for every borough or district council area, whereby they are assured of a minimum police presence on their streets and that those police officers will not be taken away on the whim of a chief constable or a Home Secretary.

Hazel Blears: I am not sure that the hon. Gentleman said that in his speech but I welcome his comments because he knows that we have already made a commitment that, by 2008, every neighbourhood in the country will have a policing team, comprising police officers, community support officers and wardens. People will have the mobile telephone numbers of their police officers and know how to contact them. I therefore fear that the hon. Gentleman is a little behind our proposals but I am delighted that he supports them.
	He also mentioned the capping criteria. I confirm that I shall work closely with my colleagues in the Office of the Deputy Prime Minister to consider how they might apply to police authority positions. He also welcomed the possibility of three-year funding settlements and our prolific and priority offender schemes, which he believed could make a significant contribution to continuing to drive down crime.
	The hon. Gentleman asked about capital investment and I am pleased to confirm the figure of £358 million. That is a general grant allocation, directly to forces, of £210 million—an increase of 13 per cent., which is £24 million of additional money. The rest of the £358 million will be used for criminal justice information technology and Airwave, and the Metropolitan police will get £40 million to continue to support the command, control, communication and information—C3i—system, which is revolutionising their command and control mechanisms.
	My hon. Friend the Member for West Bromwich, West (Mr. Bailey) made an interesting contribution, which was clearly rooted in local experience of his community. He welcomed the record settlement for the west midlands. We seem to have had an extraordinary number of west midlands contributions, which, I am sure, reflects its good settlement.
	My hon. Friend also challenged the Opposition about their policy for a block grant with no control from the centre and raised the important need for equity between communities and the need to ensure that we could drive specific programmes through some of our grants. He also praised the Together campaign against antisocial behaviour, and I am delighted that the police in his area are working with the council and the local people to tackle antisocial behaviour. We will not tolerate it, and we are making a real difference on the ground.
	The hon. Member for Orpington (Mr. Horam) has contributed to several debates on policing in the past few months, and he raised similar issues today. I am pleased to be able to reassure him that call handling, response times and standards of service are at the forefront of our minds. He will know from the White Paper that we have initiated a huge project to ensure that we have national service standards right across the police service; they will be in place by the end of 2006. They will deal not only with the speed of response—important though that is to our constituents—but with the quality of response. It is clear from early work that has taken place in Staffordshire and Lancashire that when the police respond properly to local people, the satisfaction in the services offered goes up enormously. That is not simply about turning up within a set number of minutes. Often, the police say, "We can't come now, but we will come between 2 o'clock and 4 o'clock this afternoon." They then actually turn up and do what they have said that they will do, which helps to build trust and confidence. I am delighted that we have work ongoing on that issue.
	The hon. Gentleman also asked for more police officers in his area. The allocation formula within the Met is a matter for the commissioner to sort out, but if Conservative Members are asking for more police funding, they will have to do some pretty hard and frank talking to the shadow Chancellor if they want further resources to be allocated under his proposals.

Andrew Mitchell: Will the Minister give way?

Hazel Blears: I gave way a huge number of times when I opened the debate. Perhaps I will give way when I reach my response to the hon. Gentleman's speech.
	The hon. Member for North Thanet (Mr. Gale) mentioned the British Transport police, and I hope that I gave him some reassurance that the Home Office certainly believes that that force makes a significant contribution to safety in this country. He also raised the issue of bureaucracy, and said that he wanted to see more size 10 boots out there. My hon. Friend the Member for Gloucester (Mr. Dhanda) made the point that we also want to see more women out there, as well as men with size 10 feet. The hon. Member for North Thanet is right to raise the issue of bureaucracy, and we have now embarked on trying to release more people to the front line.
	The hon. Gentleman and others raised the issue of the police having to account not only for stops and searches but for stops as well. This was a recommendation of the Lawrence report, and it is important to continue with this commitment. Recent operational experience, not at a desk but on the ground, showed that two thirds of all recordings of stops were completed in under five minutes. We are trying to ensure that we can carry out this recording in the least bureaucratic way possible, but it is important for the confidence of the community and for the protection of the police that there is an audit trail to account for why people have been stopped and in what circumstances. I make no apology for saying that this is an important part of policing. It is about building up the confidence of the community. Hon. Members will know that the issues relating to stop and search and to stops raise some of the biggest concerns, particularly among people from ethnic minority communities, and it is important that we should continue to respond in that way.
	The hon. Gentleman raised a number of issues, and said that if I could respond to all of them, he would be a happy man. I have been able to reply to about three quarters, so perhaps he will be three-quarters happy. On funding for Kent, he asked who would pay for the police who had to do extra work as a result of the licensing changes. First, the licensing changes are about flexible hours, not about 24-hour drinking. Let us put that straight. Local authorities, which will for the first time be able to set the conditions, having listened to police representations, could well set stricter conditions than are in place at the moment. The police will save some £15 million a year, because they will only be doing several thousand administrative processes, rather than the millions that they are currently engaged in. So there will be resources available. We are also consulting on alcohol disorder zones and on the possibility that licensed premises will have to make a contribution towards policing and other costs. We are well on top of that issue.
	The hon. Gentleman mentioned the delegation of training moneys from Centrex. I think that I dealt with that in my opening remarks, but I can confirm that Kent is one of the early implementers of local training. It will get £238,000 of capital and £394,000 of revenue funding in the next year to deal with that. There will also be additional transitional funding as well as the delegation of the central moneys from Centrex, so I hope that that will help with the training.
	The hon. Gentleman also raised the issue of officers being funded locally. In Kent, the crime fighting fund has funded 259 officers of the extra 270, so only 11 extra officers have been funded locally. I am afraid that I have to say to him that his representation that the whole increase has been funded locally is wrong. I am sorry to say that in such blunt terms.
	The extra costs resulting from asylum seekers were also raised by the hon. Gentleman. I do not have the detail, but I am happy to supply it to him, so perhaps he might be generous enough to say that I have satisfied three quarters of his queries. I hope he is a happier man than he was when he came into the Chamber earlier today. [Interruption.] He does look a lot happier, actually.
	My hon. Friend the Member for Gloucester (Mr. Dhanda) raised the issue of licensing changes and the need for a culture change. He is absolutely right, and I do not for one moment think that we can do that overnight. We are starting to consider the new licences from February, and they will not all come into force in November. There will be a six-month transitional period from February until November.
	I do not believe that we can change the culture in such a short time, which is why we must have good tough enforcement using the whole range of new powers that the police have, from dispersal orders and fixed-penalty notices to the alcohol disorder notices. However, we must also ensure that we bear down on advertising, work in our schools with young people and really start to introduce a more responsible drinking culture.
	My hon. Friend also raised the issue of urban communities within rural areas. Again, the way in which the local chief constable allocates resources must take account of those particular pressures on such communities.
	I can tell the hon. Member for Eastbourne (Mr. Waterson) that the police force in Sussex is receiving £11.9 million more than it would have done had the formula been strictly applied. His local force gains greatly from the fact that there is a floor in the settlement. I am delighted that his area has 149 community support officers on patrol; another 25 have been allocated to his area. His force has been at the forefront of the civilianisation programme to reconfigure its work force. All credit to the force for being innovative and imaginative in doing that.
	The hon. Gentleman also raised the issue of recorded crime. He might not know that half of all recorded violence results in no injury to the person at all. It is important that we make that distinction.
	I welcome the support of the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) for the settlement—[Interruption.] Qualified support, I think. He raised the issue of the formula. We are reviewing it, but it is largely supported by ACPO and the Association of Police Authorities, so there are no real representations for radical change of that formula. We must ensure, however, that it uses up-to-date data, and we want to align it with the performance management system.
	The hon. Gentleman asked about three-year settlements; we hope to be able to move towards those. He also raised the issue of policing the position with regard to hunting. I am delighted to say that ACPO has issued some excellent practical guidelines on how the police will enforce the law. My particular thanks go to Alistair McWhirter, who has been working on this on behalf of ACPO. He has done a brilliant job so far in taking it forward. I, too, commend North Wales police, which has a particularly impressive approach to neighbourhood policing. I visited the force recently. It has a website on which people can key in their postcode and get details of their beat officers, including how to contact them, and it also uses three-year contracts, for continuity. It has taken a lead on tackling antisocial behaviour in north Wales. I simply urge the local authorities to join with the police in that.
	The hon. Gentleman also asked me a series of technical questions, and I shall be more than happy to write to him with those details.
	I join the hon. Member for Ruislip-Northwood (Mr. Wilkinson) in expressing thanks to Sir John Stevens, the outgoing Metropolitan Police Commissioner, who has done a fantastic job. In my time in this job, I have got to know him extremely well and I have huge admiration for him, as I do for his successor, Ian Blair. I have no doubt that the Metropolitan police, with Ian Blair and Paul Stephenson from Lancashire as the new deputy commissioner, will go from strength to strength.
	The hon. Gentleman raised the issue of stops, which I have dealt with. That is about getting the balance right. He also raised an interesting point about how we can encourage high fliers in the police service, and I agree with him. If he looks at the White Paper, he will see that there are fairly radical proposals on multi-point entry to the service and not necessarily having to serve the same amount of time as officers do at the moment before being able to come through the service. We talk about exchanges, secondments and coming in and out of the different public services, as well as the private sector, to reinvigorate our police leadership.
	The hon. Gentleman talked about continual professional development, which is a personal passion of mine. I think that all officers—from constable right on through the service—need continually to develop their skills and talents.
	Finally, I turn to the contribution of the hon. Member for Sutton Coldfield. It was a little intemperate in comparison with the tenor of the rest of this afternoon's excellent debate, in which many good point were made. I noticed that he welcomed the extra officers that this Government have been able to introduce, and I am delighted about that. He also referred to the 40,000 extra police officers that his party has promised—

Nick Raynsford: Fantasy police.

Hazel Blears: Indeed, as my right hon. Friend says from a sedentary position, they are fantasy police, because the hon. Member for Sutton Coldfield also said that his party would cut taxes. Our most popular poster has been one of the shadow Chancellor and the Leader of the Opposition doing some sums, in which two and two equals five. That is probably how the Conservatives' sums will add up.

Andrew Mitchell: I am extremely sorry that the Minister found my contribution intemperate. I do not think that it was intemperate at all. At no point in my speech did I mention cutting the amount of money spent on the police, as she has just alleged. We have set out absolutely clearly in a document from the shadow Chief Secretary—which I will send to her if she wants to see it—how expenditure on asylum, which was £200 million when we left office, has increased to more than £2 billion spent and wasted by this Government, and how we will increase expenditure on police. What aspect does she not understand?

Hazel Blears: We have just had some evidence of the intemperate nature of the hon. Gentleman's contribution. He doth protest too much, methinks. He referred to funding being transparent under his party, which is certainly true: as a result of the shadow Chancellor's promised budget cuts, it will be so thin that we will all be able to see through it, as we will be able to see through the empty promises that his party has been making. We look forward to transparent funding—it will be sheer, and we will all be able to see exactly what it means.
	The hon. Member for Sutton Coldfield also raised a couple of technical issues, with which I am happy to deal. He asked whether there was funding for the Bichard recommendations. I can confirm that there is £65 million of central provision. We will see all those recommendations through and make sure that our police force have access to central intelligence so that they can be more effective in future. On the issue of reserves in relation to pensions across forces, there is about £290 million in money set aside and reserves for pensions. In our budget strategy, we expect not just record increases and low precepts but efficiency savings, including consideration of reserves, to be part of that picture. I hope that authorities will do that.
	The hon. Gentleman also referred to Hampshire refusing to take its community support officers. I suggested ever so gently that we might give its allocation to forces who wanted to take the excess, and I had lots of bidders, certainly among Labour Members. I am delighted that Hampshire has now decided to take up its full allocation of community support officers, and I have no doubt that they will do excellent work in that community.
	I simply did not recognise the picture that the hon. Gentleman painted in his final comments. He talked about low morale in the police force. I do not know how often he goes out and visits forces, but I do it nearly every week. Tomorrow I am visiting the north Liverpool division, which has done a fantastic job in reducing crime. Sickness figures are often a good indication of morale in an organisation. In his local force in the west midlands, sickness days lost have decreased by 23.9 per cent. per officer and by nearly 20 per cent. per police staff, in the past year. If that is not an organisation with high morale, which has the best police funding settlement that it has ever had and which is reducing crime and effective on the ground, I do not know what is.
	The hon. Gentleman quoted a poem from a Merseyside officer. When I was last in Merseyside, however, I met the chief superintendent in Skelmersdale—a pretty tough policing area—and he said to me that he had never been more motivated in his life. When he turns up at an incident now, he has a range of powers to tackle antisocial behaviour that he never had before. He never now has to say to local people, "I'm sorry, there's nothing I can do," and walk away. He felt more motivated than ever before in his police career. The hon. Gentleman needs to get out more and look at what the police service is doing on the ground.
	This is an excellent settlement for the police, welcomed throughout the House. I am sure there is much more that we need to do to improve policing, but it is this Government who have put their money where their mouth is, and are really helping the police force to do an excellent job—
	It being three hours after the commencement of proceedings on the motions, Madam Deputy Speaker put the Question, pursuant to Order [this day].
	Question agreed to.
	Resolved,
	That the Police Grant Report (England and Wales) 2003–04: Amending Report 2004–05, HC 247, a copy of which was laid before this House on 27th January 2005, be approved.
	Madam Deputy Speaker then put the remaining Question required to be put at that hour.

POLICE

Resolved,
	That the Police Grant Report (England and Wales) 2005–06, HC 246, a copy of which was laid before this House on 27th January 2005, be approved.—[Ms Hazel Blears.]

Local Government Finance

Nick Raynsford: I beg to move,
	That the Local Government Finance Report (England) 2003–04: Amending Report 2005, HC 241, a copy of which was laid before this House on 27th January, be approved.

Madam Deputy Speaker: With this it will be convenient to discuss the following motion:
	That the Local Government Finance Report (England) 2005–06, HC 242, a copy of which was laid before this House on 27th January, be approved.

Nick Raynsford: I am pleased to be able to tell the House that I am confirming in its essentials the grant settlement that I proposed for all local authorities on 2 December. The increase in formula grant for 2005–06 is £2.6 billion, or 5.6 per cent. All councils will receive a formula grant increase at least in line with inflation. On top of that, councils will receive increases in specific grants. That takes the total increase in grant to £3.6 billion, or 6.3 per cent. The Local Government Association has welcomed the earlier announcement of specific grants this year, which has been of assistance in total budget planning for local authorities.

Philip Hammond: The Minister just said, as he says every year, that every local authority would receive a real-terms increase in formula grant. Will he confirm, however, that when we look at the total grant received by local authorities, we see that not all authorities have received real-terms increases? Indeed, a considerable number have received real-terms decreases.

Nick Raynsford: No, I will not confirm that. The hon. Gentleman will know from the system that the specific and special grants come on top of the formula grant. If every authority has an increase in formula grant at least matching inflation, any additional grant will be a benefit ahead of inflation. This is pretty rich, coming from the hon. Gentleman. When his party was in government, year after year local authorities faced real-terms cuts in their grants—a point that the Prime Minister made quite forcefully in response to the hon. Gentleman during Prime Minister's Questions earlier today. He ought to recognise the real change that there has been: local authorities have received real-terms increases in grant in all parts of the country.

Jacqui Lait: I am grateful to the right hon. Gentleman for his generosity in giving way so early in his speech. His Government are, however, considerably less generous to the borough of Bromley, where the Department for Education and Skills has made a mistake to the tune of 30 per cent. of the additional formula grant. The Department for Education and Skills and, I think, the Minister's Department have told Bromley that it will receive the money only if an amending report is issued for 2005–06. I understand that it is rare for such reports to be issued, but if one if not issued the borough will not get the 30 per cent. Will the right hon. Gentleman be generous enough to commit himself, here and now, to publishing an amending report, or else give Bromley the 30 per cent. today?

Nick Raynsford: The hon. Lady makes a fair point. From time to time problems do occur in the highly complex process of local government settlements. This problem was drawn to my attention fairly recently, but when similar problems have been identified in the past I have agreed to amending reports. Indeed, this year we have made an amending report in respect of a number of mistakes in the census calculation for a number of authorities.
	I need to understand the figures better. As I said, I have not had a chance to look at the details because the matter has only just been drawn to my attention. We have a de minimis rule that is obviously necessary for good administration, but if the figures show a significant difference that affects the authority adversely, I shall be more than happy to put it right with an amending report.

Eric Pickles: The problem with Bromley is compounded by the problem faced by a number of other authorities. The DFES inadvertently allocated Bromley's data to Buckinghamshire, while Bristol's data were allocated to Bromley. I understand that five other authorities are involved. Something needs to be amended. One other amendment with regard to the capital adjustment mechanism and the flow calculations affects East Sussex and a number of other authorities. If it is a question of making time available, clearly, the Opposition will co-operate on this matter. It is not de minimis: these are significant sums of money.

Nick Raynsford: I agree with the hon. Gentleman that it is not de minimis. However, it is important to have a de minimis rule. That is why I undertook to look at the matter. If it is a significant problem, I am prepared to bring forward an amending report. As he will understand, if there are consequences for other authorities, those will need to be looked at, too. Only one amending report can be done for any single financial year—that is the rule laid down by the House—so we need to be certain that all the relevant factors have been taken into account. We will be prepared to do that, assuming that we are satisfied, having looked at the evidence, that there is a significant problem.
	All regions have benefited from the settlement, so let me knock on the head once and for all the entirely misleading claim put about by the Opposition that authorities in the south of England have been penalised by the grant distribution formula. There is no truth whatever in that claim. The figures speak for themselves. Many southern authorities are benefiting from some of the largest increases: Wiltshire, with a 9.4 per cent. increase; West Berkshire, with an 11.3 per cent. increase; and Wokingham, with a 13.2 per cent. increase—[Hon. Members: "What?"] Some of my hon. Friends express perhaps understandable surprise. On average, authorities in the south-east are receiving precisely the same level of grant increase as authorities in the three northern regions, so I hope that we will hear no more unjustified complaints from Conservative Members, whose councils in the south of England are generally getting a far better settlement under this Government than they got when their own party was in power.

Angela Watkinson: The Minister has been utterly predictable in giving to the London borough of Havering the usual ungenerous settlement: half the average London increase and half the increase of the neighbouring borough of Redbridge, despite having a similar population. Will he join me in congratulating the London borough of Havering and its cabinet member for resources, Councillor Roger Ramsey, who have wrought a minor miracle in bringing in the lowest council tax increase in 10 years through good Conservative house keeping?

Nick Raynsford: I suspect that, when the hon. Lady has heard these figures, she may have to go back to the councillor and discuss with him the rather changed circumstances compared with when her party was in power. Over the four years that the Conservatives were in power and the council tax applied—that is the only fair comparison; there was a different local government finance system before that—from 1993–94 to 1997–98, Havering received on a per capita basis an increase of just 2 per cent. in grant. That was all it got. On a like-for-like basis, in the seven years in which this Government have been in power, Havering has received on a per capita basis a 44 per cent. increase in grant. I sincerely hope that she will not only talk to her Conservative councillors and ensure that they understand that it is this Government who have made possible prudent budgeting in Havering, but have the decency to explain to the electorate of Havering that it is this Government who are ensuring that the council can deliver services cost-effectively.

Kevan Jones: I am very happy to hear how well southern Conservative seats have done out of the Labour Government, but that will not go down too well in County Durham, which has received far less than the figure that has just been highlighted. Did not the Conservative Government skew money to their local authorities? Why are we not doing it?

Nick Raynsford: On the same per capita increase basis that I just used, during the seven years in which we have been in government, the county of Durham has received a grant increase of 53 per cent. I hope that my hon. Friend understands the point that I am making, which is that we have been ensuring a fair allocation of grant to authorities in all parts of the country. The Opposition's argument that the south has been penalised and treated badly simply does not stack up. However, we are ensuring justice and fairness for authorities in the north, as well as in the south.

Several hon. Members: rose—

Nick Raynsford: I shall give way to the hon. Member for Runnymede and Weybridge (Mr. Hammond) and then to other Members.

Philip Hammond: I am grateful to the Minister, who is talking about the per capita increases that authorities are receiving. Following on from my earlier intervention, can he confirm that every local authority is receiving a real-terms per capita increase in total grant funding?

Nick Raynsford: No; the point that I was making is that every authority is receiving a real-terms increase in grant on a like-for-like basis. [Interruption.] In formula grant, which is the fundamental grant, there is a real-terms increase for every authority. There will of course be variations when per capita factors are taken into account. I used these figures because those used by the hon. Member for Upminster (Angela Watkinson) were based on a per head of population calculation. I felt it right that a proper comparison be made on a fair, per capita basis, which is what I have done.

Teddy Taylor: The Minister mentions boroughs in the south-east that have done very well by getting more than 10 per cent. However, a published table of all-purpose authorities shows that Bournemouth, Brighton and Southend-on-Sea have all received 4 per cent. Bearing it in mind that seaside towns have a multitude of social problems associated with, for example, houses in multiple occupation and asylum seekers, can he name any all-purpose borough in England that has received less than 4 per cent.? Does he agree that he has discriminated against seaside towns?

Nick Raynsford: No. I cannot name any unitary authority in the whole of England that is getting less than that figure because that is the floor, which guarantees that every authority gets at least 4 per cent. That shows our commitment to ensuring such an increase irrespective of demographic changes, which sometimes result in authorities being entitled to less under the formula. I should point out, however, that if we use for Southend the same formula that I used in response to the hon. Member for Upminster and my hon. Friend the Member for North Durham (Mr. Jones), we see that things were not so good in Southend when the hon. Gentleman's party were in control. The comparisons have to be made with a degree of caution because, as he knows, back then Southend was a district council, not a unitary authority. During the relevant four years in the 1990s, Southend received not an increase in grant but a reduction of 4 per cent. Under this Government, Southend unitary authority has received a 52 per cent. increase in grant, which further confirms that authorities in all parts of the country are receiving good grant increases from this Labour Government.

Several hon. Members: rose—

Nick Raynsford: I give way to my hon. Friend the Member for Workington (Tony Cunningham).

Tony Cunningham: My right hon. Friend is fully aware that in recent weeks, Cumbria has suffered severe flooding and storm damage, as a result of which hundreds if not thousands of properties will be empty for long periods. That could have a serious impact on the budgets not just of Cumbria county council but of other local authorities such as Carlisle city council and the police authority. Is he willing to meet representatives of those authorities to consider how to resolve this unique situation?

Nick Raynsford: My hon. Friend makes an absolutely fair and important point. My hon. Friend the Member for Carlisle (Mr. Martlew) has already been in touch with me about this issue, and we have discussed the significant potential impact on Carlisle's council tax revenue of the large number of properties made uninhabitable by the flooding. There is a convention whereby we do not alter the basic figures that underpin a settlement after November, for the obvious reason that everything has to be done on a particular fixed date. Because the flooding took place after that date, it is not possible to alter this year's settlement in the way that my hon. Friend the Member for Carlisle asked us to do. I am, however, dealing with this issue as a matter of urgency, and I undertake to meet my hon. Friend the Member for Workington and representatives of the relevant authorities to discuss how we might respond to these rather exceptional circumstances. We are also looking urgently at the possibility of making available assistance though the Bellwin scheme, in order to help not just Carlisle but the surrounding authorities cope with the pressures that they face.

Several hon. Members: rose—

Nick Raynsford: I want to make a little progress before taking further interventions. It is only a three hour debate, and I shall have to make some progress if others are to contribute.
	The settlement builds on sustained grant increases over the years since 1997. A real-terms increase of 33 per cent. in grants to local government since then compares with a 7 per cent. real-terms cut in the previous four years. We are looking to the future, too, with the introduction of three-year settlements for local government, to be phased in from 2006–07. That will provide more stability and predictability and enable councils to plan more firmly for service improvements and moderate budget and tax increases. Stability is very valuable, but we should not neglect to re-examine the fundamentals of local government funding. That is why we appointed Sir Michael Lyons, whose inquiry is now under way. In response to what he says, we will carefully consider the detailed case for making changes to the present system of local government funding in England and take note of any recommendations.
	Where Government initiatives lead to increased cost burdens on local authorities, we are committed to meet them. Sometimes lengthy discussion is, quite rightly, needed with local government partners to get the details right. I mention, in passing, the implementation of the Freedom of Information Act 2000, where initial estimates from local government implied a potential cost of more £100 million, but after detailed discussion, a figure somewhat less than £20 million was agreed. It is important to bottom out the figures and ensure that they are accurate. The commitment is there to provide the additional funding. That has been done.
	Similarly, my right hon. Friend the Secretary of State for Culture, Media and Sport has conducted two rounds of consultation and agreed proposed fee levels with local government, which we believe are sufficient to fund average administration, inspection and enforcement costs associated with the discharge of local authority functions under the Licensing Act 2003. I can also confirm the Government's plans, following the revisions made by the Office for National Statistics to its population estimates used in the original calculations for the year, to amend the local government settlement for 2003–04.

Lindsay Hoyle: My right hon. Friend may be aware of six districts in Lancashire for which money is trapped or withheld, according to which term we wish to use. In the case of Chorley, it amounts to £1,324,000. I acknowledge the 6 per cent. increase, which is much higher than ever envisaged by the people of Chorley, but the Minister knows that 1 per cent. brings in just about £50,000—not a great amount of money. However, the money trap is very important to the future of Chorley, so when will the Minister, through the adjustment of the floors, enable Chorley and other shire districts to collect the money? It amounts to only £29 million for the whole country. Can the Minister offer us some hope in his answer?

Nick Raynsford: My hon. Friend raises an interesting point, and I hope that he will bear with me as I explain the importance of the floor mechanism and how it benefits authorities that would otherwise receive an unreasonably small grant increase. In the county of Lancashire, for example, Preston is one of the authorities that is on the floor. Without the floor mechanism, it would not receive the basic grant increase of 2.5 per cent., which is sufficient to match inflation.
	For reasons that I have explained, the floor is essential and all hon. Members accept it. The problem is that some people have difficulty in understanding that the floor has to be paid for and the costs have to be met. In the past, we operated a system of ceilings, under which the authorities that received the largest increases had a fairly significant reduction in their grant to meet the costs of the floor. We received very strong representations from local government: authorities did not like the ceiling, which they thought was unfair to the authorities with the largest increases. In response, we introduced an arrangement under which we reduced the grant entitlement for all authorities above the floor by a much more modest amount than would have applied under the ceilings arrangement.
	This is the first year of the new system and I obviously want to reflect on how it operates before I consider any further changes. As hon. Members will recognise, I could change the deck chairs every year—[Hon. Members: "The Titanic"]. I would never dream of thinking of local government in association with the Titanic, but if I followed the request of my hon. Friend the Member for Chorley (Mr. Hoyle), I could adjust the chairs on a regular basis. I hope that he will understand that Chorley's increase of 5.7 per cent. is a good one, and that most other Lancashire authorities have received good increases too. It is therefore right that there should be some reduction in the overall entitlement to meet the costs in Preston and west Lancashire. Otherwise, those authorities would get less.

Gordon Prentice: Will my right hon. Friend give way?

Peter Pike: Will my right hon. Friend give way?

Nick Raynsford: I give way to my hon. Friend the Member for Burnley (Mr. Pike).

Peter Pike: Burnley is a very deprived borough, as is Pendle, yet it is losing money. We all understand the concept of the floor and that the new method—by which a little is taken from all those authorities above the floor level—is fairer than a ceiling. However, will my right hon. Friend assure us that the 2007 review will mean that areas such as Burnley, Pendle and Chorley will receive everything to which they are entitled? They have major problems and very small budgets.

Nick Raynsford: I understand those concerns. I have visited my hon. Friend's constituency and seen the very considerable problems with which the local authority is wrestling in its attempt to ensure that local needs are met. Obviously, we are trying to achieve good budget settlements for authorities such as his, given the real difficulties that they face, and I believe that an increase of 5.9 per cent. is a good settlement for Burnley this year. We are conducting a review of the formula in the coming year, as my hon. Friend knows, but I hope that he will accept that instability is not good for local government. We have changed the mechanism governing floors and ceilings this year, which means that an immediate commitment to reconsider the matter would be somewhat disruptive.

Gordon Prentice: Will my right hon. Friend give way?

Nick Raynsford: I seem to be getting a lot of pressure from east Lancashire, so I will give way to my hon. Friend.

Gordon Prentice: My hon. Friend the Member for Burnley (Mr. Pike) seems to have stolen my script, but will my right hon. Friend say why the Government cannot pay for the Prestons of this world? That would be better than depriving communities such as Burnley, Pendle and Chorley. In addition, I should like to return to the point that he was making before the intervention from my hon. Friend the Member for Chorley (Mr. Hoyle). The population estimates have significantly underestimated the true population of Pendle. My hon. Friend the Member for Chorley said that the Office for National Statistics had recognised that and that changes would be made to the grant paid in 2003–04 and in subsequent years. Does my right hon. Friend have the figure for Pendle, and what does that mean in terms of additional grant?

Nick Raynsford: My hon. Friend will know that Pendle's grant will increase this year by 6.6 per cent.—a very significant amount. He will also know of the dramatic change brought about in Pendle as a result of the return of a Labour Government. According to the figures that I quoted earlier, Pendle got no increase in grant over the last four years of Conservative Government. In fact, its grant was reduced by 12 per cent. One of the more deprived areas in northern England lost grant as a result of Conservative policies. Under this Government, there has been a per capita increase of 38 per cent. in Pendle, which shows that we are committed to increasing the area's grant. I hope that my hon. Friend will understand that it is not possible for us to add even more money to a settlement that is already pretty generous. That would be the implication of pursuing his request for additional Government money.

David Amess: Will the Minister give way?

Graham Brady: Will the Minister give way?

Nick Raynsford: I need to make some progress, but I have been generous to Labour colleagues so I shall take one intervention from the Opposition before moving on.

Graham Brady: I am grateful to the Minister for giving way. I do not want to be too helpful to him, but he was keen to stress that he has been mean to authorities other than Tory-run authorities in the south of England, and I can bear that out: he has also been mean to Trafford, a Tory-run authority in the north. That is especially important because Trafford has had a worse deal in each of the past four years than the average for metropolitan authorities in the country. Does the right hon. Gentleman agree that it is time for some fairness in this matter and that Trafford's grant should increase by at least as much as other metropolitan authorities? Trafford used to have weak status when it was under Labour control, but that has been improved to fair. We want to make further improvements, but when the previous Labour administration was replaced in June, it left us with terrible financial problems.

Nick Raynsford: I remind the hon. Gentleman that Trafford is getting a good increase in grant of some 5 per cent. That did not happen in the days when his party was in power. It is extraordinary that Conservative Members, who are only too happy to claim the largesse that they want for local government, have forgotten the record of their Government. When the hon. Gentleman's party was in power, Trafford—also a deprived area in the north—received a 6 per cent. per capita grant increase over four years, which was well below inflation. Since this Government came to power, Trafford has received substantially more, with a 45 per cent. increase on a like-for-like basis. I hope that we shall not hear any more about meanness and that, in future, the hon. Gentleman will use the word "generosity".

Edward Davey: The Minister has been telling the House how generous the Government have been in their real-terms grant increases. Can he tell the House what the average real-terms increase in council tax has been during the same period?

Nick Raynsford: The hon. Gentleman knows that council tax has risen significantly, but it has not gone up by anywhere near as much as the old rates used to go up when the Conservatives were in office. We might explore that later.
	There has been a significant increase in council tax, which is why the Government have made it clear, against the Liberal Democrats' advice, that we will cap authorities that impose unreasonable increases. The decision on council tax increases is made by local authorities and the hon. Gentleman would do better to talk to Liberal Democrat councils that seem to have an unhealthy appetite for increasing their council tax. Last year, his party had the unenviable record of the largest increases in council tax of any party—more than the Conservatives and substantially more than Labour. I am afraid that that high-tax tag will hang round the neck of his party.

Shona McIsaac: I draw my right hon. Friend's attention to the actions of North East Lincolnshire council—it is a coalition of Conservative and Liberal Democrats, so we have the worst of both worlds—which has just sent a letter to the residents of Humberston Fitties chalet park about their rent increases this year. The rent for one large plot in the chalet park is rising from £720 to £1,365. The Liberal Democrats increase not just the council tax, but every rent.

Nick Raynsford: I am concerned to hear what my hon. Friend said about the very large proposed increase in rent for people living in chalet parks, who are often retired and on fixed incomes. I sincerely hope that North East Lincolnshire council, which has had considerable difficulties and whose performance has not been good recently, will look carefully at how to deliver value-for-money services and not charge unreasonable amounts.

Michael Fallon: Before the Minister leaves the subject of per capita funding, can he explain why the league tables on per capita funding show that Sevenoaks district council comes bottom, with a 5 per cent. cut over seven years? Why are we being penalised?

Nick Raynsford: Sevenoaks, as the hon. Gentleman knows, is a relatively well-off area with substantial resources that it can use. One of the characteristics of the hon. Gentleman's Government was that deprived areas suffered severe reductions in their grant and more affluent areas, curiously and perversely, received grant increases. We are ensuring a fairer system. The hon. Gentleman knows that in his area the aggregate of local government finance has risen considerably, because education and social services are delivered not by district councils but by county councils and account for the overwhelming majority of local government costs. Clearly, Kent county council and others in the south have continued to receive substantial, above-inflation increases.
	I confirm the plan to amend the settlement for 2003–04. As I made clear to the hon. Member for Beckenham (Mrs. Lait), we will consider the case that she presented.
	I turn briefly to the consultation process. We received 299 written representations within the consultation deadlines from the LGA, the Association of London Government, local authorities, local authority groups and hon. Members. We met delegations from six local authority associations and representative groups to discuss the proposals. The main points made in consultation were as follows. The abolition of ceilings on grant increase was generally welcomed, as was the continuation of a floor or minimum guaranteed grant increase. I have already touched on that in response to an intervention. Most of the bodies welcomed the modifications that we proposed to the incorporation in the formula grant of the social services preserved rights and residential allowance grants. I understand, though, that not everyone can win when grant distribution is changed, and we will ensure that any transitional effects of future transfers continue to be examined carefully with local government.
	We faced a dilemma in considering the use of data other than population figures based on the 2001 census. In proposing not to use 2001 census data in the 2005–06 formula spending share calculations, we balanced our desire to use the most up-to-date data against our aim of providing stability in local authority funding. Using new census data in the funding formula is not a simple task. It is technically incorrect to update the census data in the police formula. In other areas, the changes needed to incorporate the 2001 census data would break the formula freeze and could cause large changes to the distribution of FSS. We will look to incorporate 2001 census data in the funding formula once the formula freeze has ended with this settlement. That will allow us to use 2001 census data in 2006–07, assuming that agreement can be reached on an appropriate way of doing so.
	After considering the points made in consultation, I have decided to confirm the basis of grant distribution proposed on 2 December. The floor grant increases remain at 4 per cent. for authorities with education and social service responsibilities, 2.5 per cent. for shire districts and fire authorities, and 3.75 per cent. for police authorities. Where justified, we have reflected representations made to us by correcting the data used. The routine updating of data used, in particular on council tax base and capital allocations, will have made mostly small changes to individual council grant figures.
	Given our substantial investment in local government and the scope for efficiency gains, there is simply no excuse for excessive council tax increases. This settlement ensures that all properly run authorities can provide a high level of service.

Nick Harvey: The supporting people programme, which the ODPM funds through local government finance, seems to have been something of a success for the Government. Is it not, therefore, a matter of regret to the right hon. Gentleman that the funding will be reduced next year and frozen thereafter? During the consultation that he was involved in, did he consult local government about a change in the way that supporting people funds are allocated? Might it not be a good idea to do so before enacting a change in the formula?

Nick Raynsford: There has been detailed discussion with those involved in local government and others, because the matter affects voluntary organisations and other bodies involved in providing supporting services to people whose needs go wider than accommodation.
	The hon. Gentleman will be aware, as he has obviously looked into this, that the budget for supporting people grew exponentially during the transitional period. Although original estimates were for less than £1 billion, we faced a prospect of £1.8 billion of expenditure last year, with clear indications that, in some cases, value for money was not being achieved and some additional costs had been moved into that area, because it was seen as an opportunity to recover costs that would otherwise not be met. It is therefore right and prudent that we should look at the matter very carefully, as we are doing.
	We have set a budget of just over £1.7 billion for supporting people over the coming year. We will continue to consider ways of ensuring that we deliver value for money. The hon. Gentleman's initial comment was right: this is a success story. The programme has ensured more effective help, but I hope that he will agree that the work must be done in a cost-effective way.

Paddy Tipping: The Minister will know that there has been widespread consultation on the local government pension scheme and that regulations have been laid before the House. Will he give two assurances? First, will Members have the opportunity to discuss those new regulations? Secondly, even at this late stage, will he meet representatives of the members involved?

Nick Raynsford: There has been lengthy consultation on the local government pension scheme from 2003 onwards. Because of genuine concern expressed throughout local government at the financial implications of the increasing costs of the scheme and the implications of the actuarial valuation that comes into effect this year, we have made some modest changes—very modest changes indeed—that come into effect from 1 April.
	The House will have an opportunity to consider the regulations, which will be debated. I hope my hon. Friend will make whatever points he wishes to make at that time. However, I stress to him that the Government's objective is to maintain the viability of a good pension scheme which ensures that the recipients can receive funded pensions based on final salary. That is not available to quite large numbers of other people. Calls for increased funding going into the local government pension scheme, which would have an immediate knock-on effect on council tax, are not likely to be well received by council tax payers whose own pensions are rather less secure, and in some cases less generous, than those available to local government employees. So there are difficult issues that need to be addressed.
	In exchange for the good increases in grant that we are making available to local authorities, we expect to see a continuing downward trend in council tax increases in 2005–06. We will be looking to all authorities to budget prudently and to minimise demands on council tax payers, and we will expect to see an average council tax increase of less than 5 per cent. in England. Hon. Members will recall that we took capping action against 14 authorities in the current financial year. We would prefer not to have had to use those powers, but make no mistake—if necessary, we will take capping action once again in 2005–06 to deal with any excessive increases in council tax.
	Nobody should presume that the capping principles that we applied in 2004–05 are a benchmark for 2005–06. We are prepared to take even tougher capping action this year if that proves necessary. That applies to all authorities, including fire and police authorities. I have already written to all local authority leaders to make clear the Government's views on council tax and capping. None of them can reasonably claim to be unaware of our intentions. We are in a new era now, in which high council tax increases are a thing of the past. We will not tolerate excessive council tax increases in 2005–06 or in years to come.

Philip Hammond: Perhaps, then, the Minister will answer the question that I put to the Prime Minister earlier and to which I did not receive an answer. How is an authority such as Runnymede, which has received a 0.4 per cent. increase in per capita total grant between 1998 and now, expected to deliver high quality services and keep council tax low?

Nick Raynsford: The hon. Gentleman speaks for one of the most affluent local authority areas in the country. He knows that the authority does not face anything like the serious disadvantages that most other authorities face. We expect all authorities to budget prudently. We do not expect them to increase the council tax. They have a substantial council tax base and they have no need to make an unreasonable demand on council tax payers. We expect them to budget prudently and to ensure that demand on council tax payers is kept to the lowest possible.
	Our plans for 2005–06 constitute another excellent settlement. We are continuing the Government's provision of a stable and well funded platform for local service improvement. Working with local government, we will continue to develop our proposals for improved financial systems for the future. In return, we can and do expect councils to plan for reasonable council tax increases this year. I commend the settlement to the House.

Eric Pickles: Today in the United States of America is groundhog day. The irony of the fact that the Government have chosen this day to present the revenue settlement for local government will not be lost on the House. The repetitious nature of the argument means that we can move backwards and forwards in time, measuring the continuing rise of council tax under the Government. A 70 per cent. increase in council tax since 1997 is a monument to the endurance of stealth taxation under this Labour Government.
	The Opposition have a much better record on predicting council tax levels than the Minister, and while I am sure that most authorities will achieve a rate increase below 5 per cent., the Government are deluding themselves if they think that the public will quickly forget the massive increases of the past. This year's figures are just a rest while Labour gathers its strength for a planned massive onslaught on the middle classes of rebanding and revaluation, subject to the will of the electorate.
	During this brief pause in squeezing middle England, the Minister continues in the grand tradition of the entertainer of the House on the complicated matter of local government finance. This year he is the impresario of a unique three-ring circus. The first ring is the fiddled funding that punishes Conservative-controlled authorities and rewards Labour ones. The second ring contains the floors to mitigate the violence of the first ring. The third ring, which grows steadily each year, is the bung to cover the inadequacies of the first two rings.
	Let us examine the bung. Each year the size of the bung gets bigger. Last year it was £340 million, and this year, with £350 million ring-fenced, it rises to £1 billion. Surely the chairman of the Local Government Association, Sir Sandy Bruce-Lockhart, was right when in December he commented:
	"The money won today is a one-off and doesn't help address the fact that the burden on council tax is unsustainable and is far higher than local councils believe people can afford to pay."
	In The Times, Tony Travers, who is much respected, described the settlement as a short-term fix to the deep problem of local government finance. He warned:
	"The whole process will be repeated next December".
	So despite the bung, many of the features of the previous settlements that have brought great discredit to the process remain in place.

Clive Betts: I am sure that the hon. Gentleman recognises that we are dealing with the 2005–06 settlement today, and did not Sir Sandy Bruce-Lockhart, on the morning that the Minister made his initial announcement, say that the Local Government Association wanted £1 billion extra to make it a good settlement that would keep council tax rises low and keep services going forward? That is precisely what my right hon. Friend delivered, so are not the Local Government Association and Sir Sandy entirely satisfied by what was produced?

Eric Pickles: The hon. Gentleman has considerable experience in running a council, and I am mortified that he seems somehow to have lost his grip on the facts. He needs to remember that Sir Sandy was talking about the burdens on local authorities, and a one-off bung will not take care of those. I will come to that point later in my speech.
	As I was saying, some of the features of the previous settlement, which brought great discredit on the formula, remain the same. Once again, four authorities are expected to passport their full increase in grant straight across to the schools budget—Bromley, Poole, Richmond upon Thames and West Sussex. Some of those authorities have not seen an increase in the budget for three consecutive years for the other services.
	The Minister measures the increase in grant, but fails to address the increase in costs for local authorities. For example, between 1997 and 2000 the cost of educating a primary school child increased by 29 per cent. in real terms. He was equally silent about the extra burdens imposed on local authorities by the Government. Has he forgotten so quickly the report of the Audit Commission on the causes of higher council spending in the last financial year? It said:
	"National cost pressures taken together account for about £2.3 billion of the total increase in councils' spending of £4.3 billion. In other words, slightly more than a half the total increase is due to national pay and price inflation, increased national insurance and general population growth".
	All Members of this House will be familiar with the service pressures on their authorities, including pressure on child services and care for the elderly in social services, and in relation to the environment, including waste management and the effects of EU landfill directives. Not so long ago, we had a debate about pressures on licensing and planning fees and freedom of information, and reference was made a few moments ago to increases in pension and insurance costs.
	Let me use one item to speak for all those issues—supporting people. We all have supporting people schemes in our constituencies and we are aware of the progress and independence that they can engender among the most vulnerable in our society. The total amount of supporting people grant for England has been cut by 5 per cent. in cash terms to £1.6 billion, and the Government propose to hold it at that level for the next two years. I am aware that the new formula is being consulted on, but it puts into sharp relief a situation in which schemes have been started and seed money offered, after which they have been abandoned. The alternatives for local authorities are to meet the growing needs or cut provision to the most needy in society.

Richard Burden: What does the hon. Gentleman suggest should happen to the supporting people budget?

Eric Pickles: The hon. Gentleman raises a legitimate and predictable point, which goes to the very heart of the way in which local government is currently funded by the Government. We can no longer continue with a position whereby the Government want to direct from the centre all the sums that they want to deal out. According to the Government, the supporting people grant was never intended to meet the total amount of the services provided, although that was not clear from the beginning. What the Opposition want is a total end to these specific grants, allowing local authorities maximum discretion to deal with such problems. I know that a number of local authorities are not merely waiting to do so but have been prepared to put in a significant sum themselves.

Nick Raynsford: Does the hon. Gentleman accept that we have a commitment to reduce ring-fencing and that we have achieved a significant reduction this year? With regard to the supporting people programme, there was wide concern, not only in the local government sector but in the voluntary sector, that without a ring fence during the transitional phase in which the programme was introduced, there was a risk of leakage of funding away from some of the most vulnerable people in the country. That is the reason why there is a ring fence, but it is a temporary provision, and just as we have withdrawn other ring fences, it is our intention to reduce the ring fence on supporting people in due time, as and when the system has bedded in.

Eric Pickles: That is an interesting contribution. I doubt whether there is any hon. Member in the House who does not have such schemes in their constituency. They are an example of the growing cost base of local government and of interaction between two of the most difficult issues—provision of services for children and for the elderly. In many ways, projects such as supporting people are the future for social services. With great respect to the Minister, he can talk about the amount of increase and what he is doing about grants, but the programme is an example of how the cost base of local authorities is completely out of kilter with the grant regime. It might be helpful for the Minister who responds to the debate to give us some indication of where the Chief Secretary to the Treasury is on the promise to local authorities to look at costs in relation to the retail prices index and tell us what progress has been made on devising that formula.
	The Minister referred to the census. There is a lack of equality of treatment on population matters. The Office for National Statistics made, if we are honest, a bit of a horlicks of the last census. The way in which it moved literally millions of people around the country was like a virtual game of pass the parcel. It missed populations equivalent to major urban centres, while other areas had additional, but non-existent, people added to them. I suppose that it gives a new meaning to the expression "missing millions". After pressure from aggrieved local authorities and hon. Members, the ONS realised its mistake.
	The situation was wholly the fault of the ONS—it was not the fault of a single council—yet councils must pick up the tab. It is unfair that local authorities have to pay, because as the hon. Member for Manchester, Blackley (Mr. Stringer) robustly put it, the national statistician
	"just could not count up to 60 million."—[Official Report, 15 January 2003; Vol. 397, c. 257WH.]
	Quite rightly, Manchester now has a true count of its citizens and receives an additional £7.8 million, but other places are less fortunate. Worcestershire loses £1 million, Norfolk loses nearly £500,000, South Yorkshire police lose nearly £1 million and, worst of all, Surrey loses £2.3 million. As the leader of Surrey county council recently put it to the Minister:
	"Why should the people of Surrey pay for a mistake made by central Government?"

Kevan Jones: Because they can afford it.

Eric Pickles: That remark by a Labour Member gets us to the heart of the distribution system, because it is all about penalising Tory authorities, regardless of whether that is right or wrong. When the Government make a mistake, where do they look for the money but Tory authorities? The distribution system should be based on something better than straightforward class hatred.

Lindsay Hoyle: Will the hon. Gentleman give way?

Eric Pickles: Having spent a few moments berating the hon. Gentleman, of course I give way to him.

Lindsay Hoyle: I did not make the comment, so the hon. Gentleman should withdraw that statement.
	The hon. Gentleman says that there is a class war, but I do not think that that is the case. The Government are genuinely trying to ensure that there is a fair settlement throughout the country. Does he agree that there was a class war under the previous Government, when the likes of Westminster city council received much more help than all other authorities, and does he want to apologise for that now?

Eric Pickles: I am glad that the hon. Gentleman wants to distance himself from his colleague who made the comment, and I welcome the fact that he is looking towards equality. However, it is only right for me to respond to such provocation from a Labour Member.
	Going back to the census, a total of £26 million must be repaid by the counties. What is the justification for asking council tax payers to pick up the tab for central Government's blunder? Contrast that situation with the same Government's refusal to incorporate demographic details from the 2001 census in the final settlement.
	The settlement is using data that are 14 years out of date—they were fresh when Baroness Thatcher was a Member of the House. The Government estimate that that costs counties £116 million, which is the equivalent of 2 per cent. on council tax bills. County authorities have been hit especially hard, as have unitary authorities, such as that covering Southend. I know that my two hon. Friends who represent that fine seaside town wish to catch your eye, Mr. Deputy Speaker, and I look forward to their contributions with interest. Surely this must be the last year before the most up-to-date data are included. There seem to be two standards. The Government will use information if it will allow them to get money back from authorities, but if the information would mean that authorities would receive money, they do not use it.

Judy Mallaber: On the question of political bias, is the hon. Gentleman aware that Labour Derbyshire county council was treated appallingly under Mrs. Thatcher, but that it has just come out as the top performing authority in the comprehensive performance assessment? In contrast, Tory-controlled Amber Valley borough council received an increase that was eight times the size that its leader predicted when he asked me to lobby for more. The council has received on average a 5 per cent. increase each year during which the Conservatives have controlled it.

Eric Pickles: As I said, we know that the formula is about rewarding the Government's friends and punishing their enemies. There were very few complaints about the impartiality of the grant distribution system. The great, lasting monument to the Minister and his hon. Friends is a complete distrust of the system, which an incoming Conservative Government will have to deal with.
	Against that backdrop, on Monday the Government announced plans to introduce yet another structural reorganisation of local government. It is as if the Deputy Prime Minister sees local government as his own personal train set. Having done much to mess up the real railways, ruined our roads and dug up our countryside, he seems intent on destroying the one remaining, enduring institution within his grasp—local government. Cannot he take a hint? His desire for mayors has been rejected in countless referendums, and even when he gets one the electorate rarely pick a candidate of his choosing. The people of the north-east could not have been clearer in their message, yet he still insists on pulling local government out of the ground to check for growth in its roots.
	When will this Government learn that what councils need now, more than anything, is a period of stability so that they can plan and provide for their residents free from the latest fad from the centre? The Government have to understand that localism cannot be enforced from the centre. For localism to flourish, the centre has to get out of the way, make a bonfire of regulations and restrictions, and allow councils to plan diversity and innovation in peace. The right hon. Gentleman might feel good about capping authorities, although the cost of sending out the bills is rather greater than the money saved, but council tax payers regard that as a rather hollow gesture.

Teddy Taylor: I welcome what my hon. Friend said about the 2001 census. Is he aware that if the size of Southend's elderly population, which showed a massive increase in the 2001 census, had been taken into account, we would have been entitled to an extra £1.5 million? Is it not desperately unfair and unreasonable that Southend should lose that money because the main figure was included, but not the breakdown?

Eric Pickles: The fate of Southend is a good example of where the Government have got this wrong. Its location is central to the economic interests of the Government with regard to the Thames gateway. It is a major provider of education, and it endures some of the problems that are common to most seaside towns, with a high proportion of asylum seekers and a great deal of social pressure relating to the elderly. The Government have not recognised that.

Edward Davey: Bringing the hon. Gentleman back to his attack on the Government's failure to go forward with the localist agenda, can he explain why the Conservatives want to take control of education out of the hands of local authorities and run it from Whitehall? Where does that fit in with his party's supposed commitment to local government?

Eric Pickles: The hon. Gentleman has not grasped the localist agenda. We would not take education out of the hands of local government and run it from Whitehall, but give teachers and parents more power to run their local schools. The previous Government moved towards per capita funding for schools, and this Government sensibly continued with that. Is it not more honest to give the people who know how to run education better—teachers, head teachers and parents—the opportunity to do so?

Kevan Jones: How would Southend fare in the context of the article that appeared in last week's edition of the Local Government Chronicle under the headline, "Tories promise grant distribution with a rural twist", in which the leader of the Conservative group in the Local Government Association announced that the Tories would redistribute funding away from towns and urban areas to rural areas? Surely a place such as Southend would suffer, unlike, as my right hon. Friend the Minister said, areas such as Wiltshire that are gaining under this Government.

Eric Pickles: We promised to do away with fiddling and ensure fairness in the grant distribution system.
	Let us consider what the Government have in store next. It is not the incoming Conservative Government's intention to use the revaluation process to increase taxation or make a significant shift in banding in the form of a stealth tax. The Government have been clear about their aims. The Minister is on record as saying:
	"Council tax should be made more progressive—in other words, it should reflect more closely people's ability to pay and should more accurately reflect variations in property values.
	There are ways of doing this—for example, through a new banding system".
	Any council tax system inevitably requires some form of revaluation, but the recent revaluation in Wales, two years ahead of England, highlights how the system has been abused. One in three houses have moved up a band and only 8 per cent. of houses have moved down a band. In wards in Cardiff, Wrexham and Flintshire, more than nine in 10 houses have moved up a band.
	A re-elected Labour Government will use revaluation further to increase tax by stealth and transfer funds from specific parts of England. If the Welsh experience were repeated in England, 21 million households would be liable for local tax. Seven million homes in England would be moved up a band but only 1.5 million would be moved down a band.
	The tax on a band C home that moved to band D would increase by £128 a year. The tax bill for a band F home that moved to band G would increase to almost £2,000 a year. Areas where house prices have risen above the national average since the previous revaluation in 1991 run the greatest risk of soaring bills. As the Minister conceded:
	"Where the change in a property's value is significantly above or below the average, it is likely to change bands."
	That means a double whammy, because the Government grant to those areas would be cut as a result of the change. As figures that were released by the Halifax over the weekend suggest, London, the south-west, East Anglia and the south-east are likely to bear the brunt of revaluation.
	There will be many other towns in property hot-spot areas in England. They include Knutsford, Altrincham, Ilkley and Chepstow. They will all be hit by Labour's new redistribution tax. Surely the Daily Mail was right when it described it as:
	"Another surreptitious scheme to squeeze hard-working families until the pips squeak."

Matthew Green: Will the hon. Gentleman confirm that it is Conservative party policy to retain the council tax system?

Eric Pickles: I am glad that the hon. Gentleman intervened, because I was about to say that rebanding is not only the Labour Government's scheme but Liberal Democrat policy. On two separate occasions, Liberal Democrats could have stopped the process but decided to vote with the Government. When Liberal Democrats knock on the doors in the election campaign and try to warn people about increasing revaluation, the electorate will ask, "If you think that's the case, why is it Liberal Democrat policy?"

Nick Raynsford: Does the hon. Gentleman accept that I have made it clear on many occasions that there is no read-across from Wales to England? We are not committed, like the Welsh, to increasing a band at the top of the scale with no adjustments at the bottom. There is therefore no parallel to be drawn. Secondly, we have given an absolute undertaking that there will be no increase in yield through revaluation. Adjustments, based on bands, will be made for individual council tax payers because there is no logic in using figures that date back to 1991 as a basis for valuation. The hon. Gentleman made a point about census data. I hope that he accepts that revaluation is necessary, but that the Government have made it clear that it will not result in an increased yield and that there is no plan to increase the overall take from council tax through revaluation.

Eric Pickles: Much as I like the Minister, I would find that easier to accept without the experience of non-domestic rates revaluation. We would also take it better if we had not read several quotations from him about the need for council tax to be more progressive,
	"in other words, it should reflect more closely people's ability to pay and should more accurately reflect variations in property values."
	In plain, simple language, he has made the case very well that this settlement is going to be used as a method of social redistribution, to soak the rich, and to make middle-class people squeak to the point at which their pips pop out.

Edward Davey: Will the hon. Gentleman give way?

Eric Pickles: No.
	Frankly, this settlement has as much long-term viability as the Deputy Prime Minister's desire to build uninsured houses on flood plains. It stands about as much chance as the possibility of seeing a popular regional assembly in the north-east. While it might try to repair the damage of eight years of Labour, it will store up massive increases for the future. Thankfully, however, it will be the last one before the people deliver their verdict.

Mr. Deputy Speaker: May I just remind the House that there is a 12-minute limit on Back-Bench speeches, and that that will apply from now on?

Clive Betts: This is an excellent settlement for local government. As I said in an earlier intervention, on the morning on which my right hon. Friend the Minister made his initial statement, the Local Government Association asked for an extra £1 billion to keep council taxes down and to keep improving services. That is precisely what my right hon. Friend has delivered. I do not know whether he has yet received a letter from Sir Sandy Bruce-Lockhart saying, "You've given me precisely what I asked for. I'm very grateful indeed." Perhaps not. That is probably borne out by the response of the Conservatives.
	My right hon. Friend probably knows that I am not a great fan of the capping process. I believe that local authorities should be left to set their own tax levels, and that the electorate should then make it clear what they think of them. That should be part of the local democratic process. Capping orders were introduced after the last settlement, and that was one of the very few occasions on which I found myself unable to support the Government in this House. However, I see no need for capping orders to be introduced on this occasion, for the simple reason that I see no need for excessive council tax increases. Local authorities have the funds to enable them to keep increases down and to maintain their services.
	It was interesting to listen to the Conservatives. I could not understand where they were coming from at all. They are committed to making £4 billion of cuts to local government funding, yet they offer no description of how they would operate if, by some mischance, they were on this side of the Chamber. For all their moaning about the poverty and dire straits that some Tory authorities in the south find themselves in, we were never given a clear explanation as to whether they were asking for more funds to rectify that, or precisely where that money was to come from. Is the hon. Member for Brentwood and Ongar (Mr. Pickles) proposing that local authorities such as mine, in Sheffield, should give up money so that Tory authorities in the south can have more?

Eric Pickles: The hon. Gentleman should pay more attention to what we are saying. We are offering grant increases in line with the rate of inflation for local authorities, and looking towards improvements in health, policing and education. We would also release more than £1 billion of extra resources to local authorities. The hon. Gentleman has a distinguished record on local authorities. Given what we are offering, perhaps he will be tempted to vote Conservative at the next election.

Clive Betts: I am probably more confused now than I was before, and I do not think that it is my fault. The hon. Gentleman is promising more money for health, for the police and for education, while proposing cuts overall. What, then, would happen to road maintenance, the built environment, waste management, housing and leisure and arts facilities at local level? Given that those areas represent a fairly small part of the total local government expenditure, the cuts to those budgets would be absolutely massive. It is time for the Conservatives to come clean with the electorate, and to explain precisely what the level of the cuts would be, and what damage they would do to the built environment, which most people regard as very important. In passing, I should like to say that I am very pleased that my right hon. Friend the Minister has recognised that important area of local expenditure in this settlement, and taken steps to safeguard it. My own authority in Sheffield is bringing in council tax increases within the guidelines that my right hon. Friend has laid down. In addition, it is doing a lot to improve road maintenance and the street scene. It has the extra funds to do that because of the 5.8 per cent. increase in funding that it has received.
	I am also pleased to support my right hon. Friend's continued emphasis on the freeze in the formula. It is important that formula revisions should happen only every three years. That gives stability to local authorities and it should be continued for the future. There will always be complaints that anomalies do not get dealt with for another three years, but the stability is important.
	On that issue, therefore, may I raise a point that comes genuinely from colleagues in local government who say that this is an excellent settlement for this year? The £1 billion is welcome, but will it be incorporated in the starting base for the settlement for 2006–07? If it is just a one-off amount that is then taken away, the stability that I know my right hon. Friend wants in local government finance will not be achieved. Local government is looking for some certainty in its plans and spending for this year. Will the extra money it has received—those who are genuine will call this a generous settlement—be in next year's base so that what is given this year is not taken away next?
	There are some big issues around, such as extra spending on waste management. That, again, is important and to be welcomed; it is not something that anyone is against. My own authority in Sheffield already has advanced plans for a new incinerator and has a long-term policy of developing heat through burning waste, which is supported in the city. My authority is a long way down the road, but there will still be extra costs in paying the contractors. The issue of equal pay is around and although the supporting people programme is excellent, some of its projects are at risk and authorities might want to fund them out of mainstream funding. That could be another burden for the future.
	I am sure that my right hon. Friend and his colleagues will listen, however, because of what happened when local authorities put the points about the introduction of the new licensing arrangements for public houses to them and said, "We don't think we can fund this without having to divert money from other services under the indicative licence fees that have been given to us." Ministers listened. There was genuine consultation and increases have now been agreed, plus an independent review process. That is genuinely welcomed and very pleasing for those who are involved.
	On the other hand, I hope that my right hon. Friend will begin to listen to the debate on education. I know that he is passionately committed to reducing specific grants and ring-fencing, but to some of us the whole approach to funding schools directly and giving guarantees rather smacks of a large element of ring-fencing. I am still not sure about the amount of joined-up thinking, or even joined-up talking, that has gone on between Ministers at the Department for Education and Skills and the Office of the Deputy Prime Minister on the whole issue of school funding.
	I am quite concerned by some of the talk I hear about new localism. I very much support bringing into play the roles that parents, teachers, tenants' representatives and others can play in running local services, but separating out the funding and making the running of those services completely disparate leads to new localism being in danger of becoming new local fragmentation. There is a lack of joined-up government and of people working together to deliver services, because they think of themselves as being apart and they do not connect with each other. I warn the Government about that and hope that there can be some thinking on the issue, because this trend worries me considerably.
	Like other hon. Members, I await the report on the balance of funding and Sir Michael Lyons's inquiry. It is important that we give local authorities more responsibility to raise the money. That would lead them to connect more with their local electorate and it would enhance and support the whole process of local democracy.
	At the same time, we need greater fairness in who carries the burden for local services. It is welcome that council tax increases this year will, on average, almost certainly be under 5 per cent., but the reality is that the increase in the business rate is an awful lot less. Year on year, the domestic council tax payer pays a greater percentage of the cost of local government and the business rate payer pays a lower percentage. That is not fair; in the long term, it is not sustainable.
	I feel that the logic is to move the business rate back into local government and tie it into the council tax increase so that both go up by the same amount each year. That is a step forward that would be fair in getting more responsibility back to local authorities for raising their own finance. It would also ensure that business rate payers paid a fair share towards their local services.
	I also very much welcome the campaign to increase council tax benefit take-up. In the end, more fundamental reform will be needed, but in terms of what comes out of the Lyons inquiry, if we can achieve a better system of council tax benefit and a higher take-up among owner-occupiers, and at the same time stretch the bands at the top end, we can make council tax a progressive form of taxation. At present, it is broadly neutral, the problem being that at the bottom end it is regressive, because many people entitled to benefit do not take it up, and it is also regressive at the top end. If we can tackle those two issues, we can make council tax broadly progressive, which will mean much wider support.
	I say to the Liberal Democrats that I have some sympathy for an additional local income tax for larger authorities of the sort that the Chartered Institute of Public Finance and Accountancy has been promoting. But if one takes away any form of property tax to fund local government on the basis that one wants to be more progressive, and if one moves purely to a system of local income tax, the reality in London and the south-east is that none of the very wealthy foreign nationals who live in this city and surrounding areas will pay a single penny in tax towards the local services that they enjoy as local residents. To my mind, it is not a progressive form of taxation to let off all those millionaires from paying any contribution towards the cost of local services. The Liberal Democrats know about that issue, but they simply refuse to address it.
	I shall conclude, as I know that other Members wish to speak. The settlement is very much welcomed, certainly in my constituency and by my local authority, and I commend my right hon. Friend for introducing it. It has my full support.

Edward Davey: I agreed with a few of the points made by the hon. Member for Sheffield, Attercliffe (Mr. Betts), and particularly his point on education funding, on which I shall touch later. His vital point was that if the Government go down the road of ring-fencing all funding for schools, that is a big step towards centralisation, which will undermine local authorities and local democracy and be one of the biggest retrograde steps under this Government. Certainly, I share his views on that.
	Tonight, we are debating not just the settlement but some of the changes made to the provisional settlement in the final settlement tabled early this week. One or two changes to that provisional settlement, although small, have gone in the right direction. That has been beneficial for the council in my constituency—the Government have listened to the representations from the royal borough of Kingston, and I want to put on record my gratitude for that.
	On the night of the statement of the provisional settlement, there were many worried people in Kingston. The school settlement looked extremely low, and when we examined the small print we were even more worried. Apparently, nearly 400 children had gone missing and, even more worryingly, a whole school, the Mount school in Norbiton, had gone missing. The House can therefore imagine our relief when we managed to find them and convince the Government that they had been rediscovered. That made a significant difference to the funding for education in Kingston. It did not help the funding elsewhere, because as the Minister for Local and Regional Government knows, that money had to be passported through, but it helped those schools, for which we were grateful. That shows the importance of the consultation period between the provisional and final settlement.
	That aside, the whole strategy of the settlement is a pre-election strategy—a strategy to try to get the Government through the election and limit the political damage done to them by their disastrous acceptance of the Conservatives' unfair council tax. The settlement is a mixture of one-year-only bribes and arm-twisting bullying to force councils to cut services and to have low tax rises, all to avoid the real issue of tackling the local government finance problem. The Government may think that if they manage to get council tax rises below 5 per cent. on average, they have been successful. For the ordinary household, however, it is not the rises that are key but the level. The level is already far too high, and the above-inflation rises that are likely will make that worse.

Eric Pickles: Can the hon. Gentleman explain, then, why he is in favour of additional bands?

Edward Davey: The hon. Gentleman really ought to know that my party is in favour of scrapping council tax. I do not think that we have made any secret of that.
	Let me return to this year's settlement. It means that council tax will still rise faster than inflation, which means that, yet again, many pensioners will see their council tax bills rise faster than their pensions. I do not think Ministers should be as happy about that as they seem to be.
	Let us examine the record. The Institute for Fiscal Studies Green Budget, which analysed the subject in some detail, showed that council tax receipts, net of council tax benefit, have risen by some £5.8 billion since 1997. That is a rise of £521, or 81 per cent., in the average band D council tax. Because council tax is so unfair, that rise dwarfs the minor giveaways in other parts of the system, such as tax credits. According to the IFS, as a result of those tax and benefit changes the average household has gained 84p a week under Labour. That is before account is taken of council tax rises. For the average household—these are not my figures, but those of the IFS—there has been a council tax loss of £4.46 a week. When we add up all the figures and study dispute analysis of tax and benefit changes since Labour came to power, we see that the average household is £3.62 a week worse off. That means that the council tax, by itself, has been Labour's biggest stealth tax on ordinary families.
	The Minister tried to say that real-terms grant increases had been very significant. The hon. Member for Brentwood and Ongar (Mr. Pickles) rightly pointed out that, to offset that, there had been huge real-terms rises in the costs incurred by councils. To be fair, the Minister agreed. But the problem for our constituents—the problem for council tax payers—is that there have been massive real-terms rises in council tax. Between April 1997 and April 2001, council tax rose by 17 per cent. in real terms. Between April 2001 and April 2004, it rose by 18 per cent. in real terms. Those real-terms rises mean that council tax has increased faster than any major tax under Labour, although it is the most unfair tax in Britain today.
	In some respects, Labour has made progress with making Britain a fairer society, but how can it expect to make Britain as a whole a fairer society when its favourite tax is the most unfair tax? It just does not add up. Even this year, when Ministers are so pleased with themselves, council tax is rising faster than any other tax—although, to meet Government guidelines, many councils have introduced an awful lot of cuts.
	I am sure that many councils will be mentioned today. The Minister tried to suggest that Liberal Democrat councils would be profligate. I refer him to Newcastle, Liverpool and Watford, where Liberal Democrat councils are already suggesting below-inflation tax rises which are likely to be among the lowest in the country.
	There are Liberal Democrat councils—and Labour and Tory councils—that are under severe pressure because of this grant settlement, despite the Government's assurances. Councils represented by all parties are trying to juggle with the various pressures, and having to make very difficult decisions about services and tax. That, I think, is why at the end of his speech the Minister raised the spectre of capping. Councils are having to make tough decisions, and it is likely that despite the best endeavours of many councils of all parties, some with particular local problems may have to consider above-average tax rises. It looks as though the Minister will come down hard on those councils.

Kevan Jones: In 2003, Liberal Democrats fighting the election in City of Durham promised everyone a £100 council tax rebate. Can the hon. Gentleman tell me when the Liberal Democrat council will honour that commitment? If the answer is that people will have to wait for a local income tax, I refer him to the Liberal Democrat website, which shows that two average earners in a house in City of Durham would pay more rather than less council tax under the local income tax proposals. Will he come clean and tell the electors of Durham when they will get their £100 back?

Edward Davey: The majority of the people of Durham would certainly gain under a switch to local income tax. I hope that the hon. Gentleman will tell his constituents that. As regards the £100—

Kevan Jones: Will the hon. Gentleman give way?

Edward Davey: I would just like to answer the hon. Gentleman's first intervention. In the run-up to the 2003 elections, we set out the policy that we wanted a 50p top rate of tax on incomes above £100,000 to generate the cash to enable councils to do that. That is the policy that councillors fought on throughout the country. We stick by the idea that we can reduce local taxes by using the money that we get from that higher rate of income tax on people earning over £100,000. I wonder whether he wants to tell the House whether he is in favour of, or against, that 50p rate on incomes above £100,000.

Kevan Jones: I would like the Liberal Democrat council in Durham to be honest with the electorate and fulfill its commitment to give a £100 rebate. Can the hon. Gentleman confirm that under the proposals on the Liberal Democrat website, which I checked this afternoon, two average earners in a household in Durham, or any other place, would pay more council tax than they pay now? The website has a rider at the end that points out that they will pay more, but that that will help poorer people.

Edward Davey: There are Conservative scare stories—perhaps the hon. Gentleman is quoting those—that if a household's income totalled above £50,000 those people would pay a little more, but most households in his constituency would pay far less. Nearly 90 per cent. of pensioners in pensioner couple households across the country would benefit from our proposals. I hope that he will tell that to his constituents.

Clive Betts: rose—

Kevan Jones: rose—

Edward Davey: I have given way twice to the hon. Member for North Durham (Mr. Jones). I give way to the hon. Member for Sheffield, Attercliffe.

Clive Betts: To pursue the point that I made earlier, will the hon. Gentleman explain how, under his plans, a millionaire foreign national in this country who pays no UK income tax would make any contribution to local taxation?

Edward Davey: Such a foreign national would make a lot of contributions to the national Exchequer, which funds the grants—[Interruption.] I presume that they would pay stamp duty if they bought a property, and other taxes, so that argument does not work.
	I was speaking about the capping threat that the Minister repeated tonight. I wonder whether he will tell the House to which councils he has written. There have been rumours and speculation in the press that a number of councils have been threatened already. I wonder whether he, or at least his colleague who is answering the debate, is prepared to say which councils are his targets, and whether he will publish the letters that he has written.
	There is concern about the timing of these capping threats and capping decisions. Will the Government make decisions on capping before the general election is called? Can they give that undertaking? One presumes that as soon as the election is called, it will be too late to make the decisions and councils will be in limbo. They will have to set their budgets, but they will find out whether they will be capped only if Labour is returned after the election. Should Labour be returned, they could face the problem of re-billing if they are capped later, in May or June.
	We could reach the absurd situation that we saw last year, when councils with budgets only slightly in excess of the Government's guidelines had to re-bill and the cost of re-billing was more than the so-called budget excess. I hope that the Minister will set out the planned timetable with regard to capping, particularly as we all suspect that there will be an election in due course.
	The hon. Member for Sheffield, Attercliffe put his finger on it when he talked about the fact that the £1 billion in the pre-Budget report was for one year only. There is concern that it has not gone into the base budget. There is a fear across local government that problems are being stored up for the future, which could result in a hike in council tax directly after the election if the Government do not put money in.
	Let us consider the £1 billion figure. More than £400 million of it was one-off cash paid for from one-year raids on other departmental budgets. Will the one-off £350 million increase in revenue support grant be repeated? Will the pre-election £50 million increase in police grant be repeated in 2006–07? Is the one-year only extension of grants such as that for "Safeguarding Children" going to be repeated? Councils need to know the answers to these questions. The Government are talking about moving to three-year budgeting, but they will not tell councils whether these grants are just pre-election or longer term.
	There is a real problem here. The Local Government Association has estimated that not making permanent these so-called one-year gifts—the one-year increases in revenue support grant, police grant and "Safeguarding Children", for example—will lead to the equivalent of an average council tax rise of 7.5 per cent. The Minister can be pretty pleased with himself for achieving—so he thinks—a lowish rise, but he has achieved it only because of this one-off money. There is a 7.5 per cent. rise coming down the track, which Labour Members should be rather worried about.
	Those future difficulties are exacerbated by pressures that have simply been postponed. The amended guidance on pensions has led to a £100 million saving this year, but the money will have to be found in future. The re-profiling of waste targets means that £50 million does not have to be spent this year, but it will have to be spent next year and the following year. The recent announcement on fees is certainly a step in the right direction, particularly for the licensing regime, but the Minister will hopefully acknowledge the Local Government Association's worry that its costs will still not be covered.
	Because of future pressures arising from those one-off grants, there are problems heading councils' way after the election, and in years to come. That should worry this House. Those pressures and the lack of baseline budget increases could have been more manageable had the Government not pressed ahead with various other disastrous reforms of local government finance, particularly the ring-fencing of education and the proposed introduction of a dedicated schools grant. If a council that suffered all these pressures could bring all the money together and control it—if it were not shackled by ring-fencing—it might be able to manage by taking a flexible approach. If it had autonomy, it could move money around to deal with the pressures that it faced in a given year. But under the regime of a dedicated schools grant, such autonomy and flexibility will be gone. The problem is that the Office of the Deputy Prime Minister has been defeated yet again by the Department for Education and Skills.

Michael Foster: Is the hon. Gentleman's party for or against insisting on the passporting of 100 per cent. of funding directly to schools?

Edward Davey: We have always said that that should be a decision for local education authorities, not for Whitehall. We would not go ahead with the dedicated schools grant model because it represents one of the biggest centralisations of local government finance ever seen. It is supported by the Conservatives, and I am surprised to discover that Labour is working with the Tories—yet again—on this issue.
	I would like to understand how the Minister is going to reconcile this model with three-year budgeting. Moving to such budgeting, as has happened in Whitehall, is a very sensible local government finance reform, which we totally support. But if it happens, how will it fit alongside dedicated schools grants and capping? The whole point of three-year budgeting is surely to enable schools and local authorities to take a longer-term view and to get over the blips that come along occasionally. But how can they do that if they do not know what the capping regime will be during those three years? How can they take best advantage of that extra freedom if ring-fencing is to be increased? It will not be possible.
	It is not just the dedicated schools grant that will cause problems in future; there is also the council tax revaluation. The hon. Member for Brentwood and Ongar was right to mention it because it is the biggest ticking tax time bomb in Labour's hidden manifesto. Anyone who has seen their house price increase faster than the national average had better beware: Labour is gunning for you.

Eric Pickles: Will the hon. Gentleman give way?

Edward Davey: No. In Wales, 33 per cent. of houses have gone up by one or more bands, and only 8 per cent. have gone down. In Cardiff, 64 per cent. of households have been moved up by one or more bands and only 2 per cent. have moved down. In some wards—indeed, in some of the poorest wards in Cardiff—90 per cent. of households have been moved up one or more bands. How are the Government going to explain that unfairness to the people of England?

Nick Raynsford: It is rather unlike the hon. Gentleman not to have listened to what I said in response to the hon. Member for Brentwood and Ongar (Mr. Pickles) earlier. I pointed out that there was no parallel whatever with what is happening in Wales, where a decision was taken to add a band at the top of the scale but not at the bottom, which clearly excused the whole arrangement, as compared with any arrangement in this country, where no decision at all has been taken. Does the hon. Gentleman accept that the sort of speculative figures appearing in the press—prompted by the Daily Mail, which is renowned as a propaganda sheet that is always trying to damage the Government—should never be given the time of day? Frankly, I am astonished that the hon. Gentleman and his party have given credence to those entirely spurious figures, which are designed to stir up unjustified anxiety among the public.

Edward Davey: The Minister is trying to have his cake and eat it. He is trying to say that revaluation will happen, but that it will not be the same as in Wales. What the House and the electorate would like to know is how revaluation will be designed. We want to know the Government's policy on revaluation. [Interruption.] Unlike the hon. Member for Brentwood and Ongar, who is shouting from a sedentary position, we do not know what the Government's revaluation policy is. They have not set out how many bands will be affected, what the change in the multipliers will be, whether there will be regional banding or anything like that. I believe that this House—and, far more importantly, the electorate—should know what the Government's policy on revaluation is. Will the Minister tell the House what Government policy is?

Nick Raynsford: Does the hon. Gentleman accept that it would be foolish—though a typical example of Liberal Democrat policy—to try to take decisions before seeing the figures? We are quite rightly and properly waiting until we see the actual values in April 2005, the valuation date, before deciding on any changes to the structure of council tax banding. Is it not highly foolish—I accept, of course, that it is typical of the Liberal Democrats—to plunge in and give commitments before seeing the figures?

Edward Davey: The Minister commissioned a balance of funding review, which met for 15 months. All its results are on the Office of the Deputy Prime Minister's website, and the New Policy Institute, as the Minister well knows, investigated the effects of council tax revaluation across England. It looked at four particular scenarios, so the evidence is out there on the ODPM website. That is what people are looking at. What they see is that, for example, in three of the four scenarios envisaged in the report commissioned by the Department, a council tax band C home owner in London would face double-digit council tax rises as a result of revaluation. When the Minister intervenes, I hope that he will answer that point. Is he really going to say that there will be no losers under council tax revaluation? No losers?

Nick Raynsford: The hon. Gentleman will know, because there was a Liberal Democrat member of the balance of funding team, that the review's conclusion was that it would be inappropriate to make any recommendations on changes to the banding system—or, indeed, to local government finance—without considerable further work, which should be based on the latest up-to-date figures. The values are not yet known and we are still three months away from the date of valuation, so how can the hon. Gentleman possibly provide these forecasts? He is scaring people by talking about huge increases, but he simply does not know what he is talking about.

Edward Davey: There is an awful lot of information out there about house prices, as the Minister well knows. He criticised the Daily Mail, but I am afraid that he is wrong about that. The Halifax source, used by the Daily Mail, is one of the most authoritative sources on house price rises at local level. The Minister knows perfectly well that boroughs across London will be badly hit because their house prices have risen far above the national average.

Eric Pickles: Will the hon. Gentleman give way?

Edward Davey: No, I am engaging with the Minister. I will come to the hon. Gentleman in moment.
	Many people are concerned—because they have seen from what happened in Wales—that if they move from a band D to a band E as a result of revaluation, they are likely to face a 22 per cent. increase in council tax. When I visited Cardiff the other week, I met a pensioner on the basic pension whose house had been revalued, and had moved up three council tax bands as a result. She now faces an increase in her council tax of more than 40 per cent. That is why people are worried about revaluation. It is not good enough for the Minister to say, before the general election, that what has happened in Wales will not happen in England. People need to know more about this very significant decision.
	The problem is made worse by the double whammy effect of the grant system—

Eric Pickles: Will the hon. Gentleman give way?

Edward Davey: I am worried about the hon. Gentleman's health, so I will give way to him this time.

Eric Pickles: I could not be happier. Will the hon. Gentleman say why, if he feels so strongly about the matter, he, with his Liberal Democrat colleagues, twice voted in favour of the extra bands? Was that a mistake? Did they not mean to do it? What are the Liberal Democrats' policies in this matter?

Edward Davey: Time and again, Liberal Democrat Members have voted in this House to scrap council tax altogether. I am sure that the House would be more interested to learn the Conservative party's plans for council tax reform. Conservative Members talk about revaluation and an unfair council tax, but despite many nods and winks, we do not know what their policy will be at the general election. My party has put its policies forward again and again. We want to scrap council tax, stop the revaluation, and introduce a fair system of local income tax.
	The final problem with revaluation is storing up huge difficulties. If a council's council tax base increases above the national average, that council will lose grant. That is the double whammy that has hit Wales, and the same thing will happen in England. Councils in London, the south-east and the south-west, in particular, will have council tax bases way above the national average, according to the new figures. As a result, their grants will be cut significantly and council tax will have to rise.
	We need reassurances that the one-off increases in the pre-Budget report will become permanent, that the concerns about the dedicated school grant will be dealt with, that the council tax revaluation will be dropped and that council tax itself will be replaced. Otherwise, although the Government may survive this year's round of council tax increases, they will be storing up huge problems for the future.

Bill O'Brien: We have listened to the hon. Member for Kingston and Surbiton (Mr. Davey) make his presentation for 25 minutes. I was waiting to hear what the Liberal Democrat programme would be if that party ever had the chance to introduce a local income tax, because that is what people want to know. Will parish, district and county councils, as well as the metropolitan authorities, levy the local income tax?
	In my area, the parish and town councils would raise the tax, as would the police and fire authorities and the district council. Is that what the Liberal Democrats propose as a mechanism for raising local authority revenue? If so, it would cause panic. People would not understand what the Liberal Democrats were trying to achieve. In 25 minutes, we heard nothing about the party's policy in that respect.

Matthew Green: There is plenty of evidence about our policy, if the hon. Gentleman wants to read it. All the bodies to which he referred levy council tax already, and they could therefore also levy a local income tax. That is what happens in America, most of Europe and most industrial countries around the world. The Liberal Democrats did not invent local income tax. Many countries around the world use it already.

Bill O'Brien: The difference is that it is clearer to use a property tax to raise money for parish and town councils, and for police and fire authorities, and so on. In contrast, a local income tax would mean that local people would be asked for details by all the bodies whose services they use. That approach would not be accepted by the electorate.

Matthew Green: Will the hon. Gentleman give way?

Bill O'Brien: No, I must move on.
	I pay tribute to my right hon. Friend the Minister for the award that he has made to local government, which builds on what has happened in the past. During 14 years in opposition I served on the Front Bench as spokesman for local government and the environment, and then for Northern Ireland. During that period, we defended local services and local government against the cuts that the Tory Government introduced. My right hon. Friend the Minister and his Department have had to build from a low base to maintain and improve services, and to introduce additional services. The Tories' last measure before the 1997 election was to introduce nursery vouchers, and the Labour Government's first action was to scrap them. That was a wise move, because the vouchers were unfair.
	The Tories cut social services and highways maintenance. I served on the Standing Committee that considered the Bill to introduce the poll tax. Mrs. Thatcher declared that she would abolish the rating system and introduce the poll tax. It was implemented for 12 months, but caused great anxiety, so a lot of public money was spent on scrapping it. That is the Tories' record on local government. My right hon. Friend has made local government credible with improved services. People in local government now understand where their resources come from and what they are provided for.
	I draw my right hon. Friend's attention to the environmental protection and cultural services block, because more consideration should be given to those services. The EPCS block provides the majority of funding for many local priority services that deal with liveability, antisocial behaviour, street lighting, libraries and waste collection and disposal. Local authorities want to develop those important services. The Government have recognised the importance of those priorities and it is vital that adequate resources are provided to support that agenda. The EPCS block receives the lowest funding, and I plead with my right hon. Friend to reconsider that when the formula is reviewed, because the services involved are important.
	I also draw my right hon. Friend's attention to the neighbourhood renewal fund, which, with the co-operation of the Treasury, has provided many resources to help deprived areas. It should continue to contribute to our strategic objectives of improved funding for employment, education, crime prevention, health, housing and environmental matters. In areas such as the former mining community that I represent, where closure of collieries has led to deprivation, the neighbourhood renewal fund needs to continue. It is one way to tackle social exclusion and help deprived areas. We should continue to support deprived communities through the neighbourhood renewal fund.
	A further point concerning areas of deprivation is the fact that we are subject to data loss whereby authorities lose resources when people move out of the area. The population is reduced, but the people who are left are usually the most vulnerable and therefore most in need of care and attention. The settlement should take that data loss into consideration, particularly in metropolitan areas, which sustain most of the loss. My right hon. Friend the Minister is aware that SIGOMA has constantly made representations on that issue.
	I draw attention to the "Balance of Funding" report published by my right hon. Friend, who also set up the independent inquiry into local government funding by Sir Michael Lyons. That review's terms of reference are such that local government will benefit when the report is published later this year. One of the problems facing local government, the effects of which we have witnessed in the distribution of resources and grant, is gearing. The Select Committee that considered the "Balance of Funding" report is convinced that gearing has a negative impact on local authorities because it distorts accountability and magnifies any weaknesses in the formula and the grant system, making the entire system less clear.
	The Select Committee report accepted that gearing was a major factor in the grant system, making a difference of, on average, a 12.9 per cent. increase in council tax bills in 2003–04. Questioning of the Office of the Deputy Prime Minister has confirmed that there is no evidence that gearing has any positive effects on efficiency. I am pleased to note that in the ODPM report, the Government accept that gearing can cloud the accountability and transparency of local spending decisions. The possibility of abolishing gearing is to be welcomed, and I ask the Minister to ensure that there is no repetition of gearing in future.
	There is also the question of the three-year rolling programme of grant for local authorities. The Select Committee made it clear that that would enable authorities to publish at least indicative budgets and associated local taxes for the same period. The Government are to be commended for that programme because it helps local government to plan the provision of its services.
	Hon. Members on both sides of the House have referred to council tax. The Select Committee reported that council tax should be retained, provided that it and council tax benefits are reformed in line with other recommendations in its report. In addition, local authorities need greater freedom in the use of their other resources and the revenue that is collected at local level, to ensure that council tax payers are not exposed, as at present, to a large increase in annual bills. The Minister gave an assurance today that there would be a cap on large council tax bills. From the point of view of metropolitan authorities, SIGOMA considers that the award outlined by my right hon. Friend is a good award, from which the majority of local authorities throughout the country will benefit. I therefore commend the award to the House.

David Curry: Listening to the debate, I am reminded of the dramatic monologue, "Albert and the Lion". Finding
	"nothing to laugh at, at all",
	everybody has been
	"seeking for further amusement",
	so we had a nostalgic trip down the tunnel of love that is represented by Mrs. Thatcher, and one or two rollercoaster rides on futuristic rebanding and revaluation. I thought I might be rather eccentric and speak about the settlement.
	The first thing to say is that it is all a phoney war. There is not going to be a war this year about the settlement. Local authorities will come in uncannily at 4.9999 per cent., they will be able to get in under the threshold, and they will wave the tattered banner of Gershon in order to do so. It is a pretty unconvincing banner because it is a rather unconvincing piece of work. I shall be surprised if the Minister has to do more than utter the occasional mildly blood-curdling threat. The settlement is relatively generous and the reason for that is obvious. Both a national election and local elections are approaching, and the one thing that unites councillors and Members of Parliament is an anxiety to be able to continue in their current employment.
	There is none the less a series of wrinkles about the settlement, which it is worthwhile examining. The Minister made a wonderfully Kafkaesque remark about the census: the Government would not apply the census because that might lead to redistribution. I thought the purpose of the census was precisely in order to decide how to distribute and redistribute funding. I can see the arguments for stability, but the Minister omitted to say that stability has a price as well, in the non-gain as well as the non-loss. As a result of not applying the new census data for the service-specific formulas, North Yorkshire county council has a loss of £3.4 million. The council may well appreciate the stability, but there is a cost because of the data not being applied.
	There is also a wonderful underpayment for Westminster and Manchester. I served on the Standing Committee that considered the Identity Cards Bill. The Government told us about the potential individual cost of identity cards, based on the number of people who would come forward for them. I wondered whether that would be based on the same data as had led the Office for National Statistics to lose a significant part of Manchester and to miscount quite a large area of Westminster, in which case the cost might be actuarially somewhat different from that predicted by the Government.
	The Government are obliged to pay the money due, but in order to do so they are taking back money that councils have already spent. In 2005–06, North Yorkshire will have to pay back £1 million from its 2003–04 spend, and in 2006–07 it will pay £1 million from its 2004–05 spend. That can come from only one place. If North Yorkshire were to post a council tax increase of 4.9 per cent., 0.6 per cent. of that would be to raise the funds to give to the Government to distribute to Westminster and Manchester because of the faults in the distribution system. It is curious that this rebate, as it were—this recapturing—has been applied only to the upper-tier authorities in two-tier areas, and the districts have got away scot-free.
	The interesting thing about the settlement is that it is marooned between the Raynsford report and the Lyons report. I hope that it is the last in quite a long line of settlements promoted by the Minister, but for which in many ways I think he is not responsible. He is a very able Minister, but he works in a difficult environment. The settlements have been improvised, they are hole-plugging, and panic stations is written all over them. He has been talking about stability, but there has been absolute panic quite a large part of the time.
	When the Minister says that the settlement is not manipulated to help Labour-controlled councils, of course he is dead right—it does not need to be. The previous settlements are the ones that were manipulated. This is based on the previous ones, for 2003 and 2004, and it follows the same arithmetic. He will recall the wonderful rumpus over education expenditure to which that miscalculation gave rise. The sad thing about that in many ways is that the much-vaunted stability has meant that the Government are now too petrified to change anything at all. The Government have offered a minimum education funding guarantee. They will centralise school funding, and given that the Home Secretary was previously the Secretary of State for Education and Skills, I wonder how long it will be before we have pupils under house arrest in order to secure the efficiency of the settlement.
	I recognise that the Government have tried to help education and social services, but I agree with the hon. Member for Normanton (Mr. O'Brien) when he said that yet again the services that will experience the greatest stress fall under what is now called environmental and protective services, which do tend to be closest to the citizen. Ironically, it is just those sort of areas that the Deputy Prime Minister has been talking about in Manchester this week when he talked about clean, green, safe cities. The money to deliver that comes specifically out of the blocks that are under the greatest pressure in the settlement.
	I am tempted to say that this settlement is as good as it gets. It might well be the best settlement of the decade. I say that because from now on the skies will be dark with the chickens of the Government's spending splurge coming home to roost. I suspect that whichever party wins the general election, the next settlements will not be as welcome as this one. The Minister said clearly that he did not expect to increase the yield from a rebanding and revaluation. I happily accept that, but of course it will be significantly redistributive as well. If, as he hinted, there is not merely an increase in the bands at the top, but there might well be a new lower band, and given the large number of properties that fall under that bottom band A threshold, particularly in, for example, the towns that have had quite a vocal representation here today, and which are part of the pathfinder projects, then the redistribution will be quite significant. I would not exclude the possibility that the Government might decide that they need to find some cash to throw at stabilisation at the upper ends of the bands to prevent too great a disruption in the system.
	My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) was right to say that if we do have a regional banding there will be areas that outperform the region and where individual householders could find that they are moving up bands. As we all know, those who benefit tend not to indicate their gratitude, while those who are penalised tend to be vocal in their discontent.
	I echo what my hon. Friend said about stability. We will get the Lyons report. I agree with the hon. Member for Sheffield, Attercliffe (Mr. Betts) about the business rate. There has been an inversion in the proportions of business rate and council tax towards local government funding. The structural reorientation of the business rate solved part of the balance, but it does not solve any part of the funding. We need to solve the funding as well as the balance. However, I do think that local government will look for stability. I understand that the Minister has said that the Government's latest wheeze is that the structures of local government will be voluntary ones, and that there will be no central prescription. I hope that that is the case. A facultative system where local government could decide whether it is in its interests to move to one system or another would be sensible. What matters most of all is having a predictable and clear funding flow that delivers accountability more realistically locally, and means that local government looks rather less as if it has been occupied by an army of occupation that is occasionally enabled to operate a form of token democracy.
	I hope that this is the last of a line of improvised settlements. Once we have been batted about because of particular pressures, there will be an opportunity with the Lyons report to establish a basis for stability in the system. I hope that whoever wins the general election will regard that as their most urgent priority.

Lindsay Hoyle: This is a very important debate, as we are talking about local government and its financing and future. I thank my right hon. Friend the Minister for Local and Regional Government for the 5.7 per cent. increase that he gave to Chorley, and I recognise that it is significant by comparison with what we have had for many years.
	The history of Chorley is simple, however. Prudence was not born in the Treasury across the road; it was born in Chorley. Chorley has always been a low-spending authority, and it has prided itself on low spending, but that has always been its difficulty. Unfortunately, Chorley was not historically a large-spending authority. It saved money and, because it had good balances, it encountered problems with the Conservative Government. It was penalised for prudence in the past, and as it was a low-spending authority, it always had a low base to begin with. Tragically, whichever Government were in power, it never seemed to get its fair dues, and it was heavily penalised historically under previous Governments.
	It is that problem that comes through today. A 5.7 per cent. increase is a huge amount of money, but on a small base it means only £370,000-odd in reality. The difficulty that I face, along with the local authority and council tax payers, is that the way in which the floors have been set means that £1,324,000 is trapped. That is the case because of three years in which the ceilings have been removed, but in which the floors have been set at a certain level and the money has never been allowed to come through.
	Looking to the Minister, I need some good news for those council tax payers. I do not believe that they should have been penalised because the money has been withheld. People might not like the terminology, but that is the reality, and I am not on my own. There are six other districts in Lancashire, and a total £9 million is being withheld from those local authorities, along with the ability to set a fairer budget for council tax payers in Lancashire. Throughout the country, the total for the districts from which money has been withheld is only £29 million, which is an absolute pittance. The Department probably spends more on window cleaning over three years than the amount involved in giving the money to those districts.
	Even if the Minister cannot tell me now that we will get the money, I look to him to tell me that he will look at the formula that will release that money to ease the pressure on council tax payers in Chorley and the other districts in Lancashire and allow them to have the fair share that they would have had if the floor had been moved slightly. I am not asking for other local authorities to be penalised, although that argument might be used. I do not want to pick on other authorities, and the amount involved is a small one in the budget of the Department. Surely, there is a way of rectifying the situation not only for Chorley and Lancashire, but for the whole country. A total of £29 million is involved. Let us resolve the matter and ease the pain for the future of Chorley. It is only right to do that.
	I therefore not only congratulate the Minister, but ask him to please look at the problem, not least for Chorley and the other Lancashire districts. The amount is £9 million for Lancashire and £29 million for the country. I know that that situation can be resolved. What we want is a green light from him in his winding-up speech and an assurance that he is willing to look at the problem when the Government reconsider the formula. That is the only fair thing to do by those council tax payers in Chorley, who should not be penalised for something that is not their fault, but is a historical problem that has arisen because of the Conservative party.
	It was the previous Conservative Government who put in place that trap for us. They were unjustified in sweetening their own authorities around London. Whether it was Westminster, Wandsworth or wherever, the Conservative authorities were the flagship authorities that always got all the trimmings and extra presents going to local government. We were the ones who had nothing on the table when it came to Christmas, because unfortunately we were penalised. Let us put those wrongs right; we have the chance to do so, although it has been a long time coming. I hope that my friends the Ministers will take that point on board. Many hon. Members wish to speak, so I shall take no more time, except to say to my friends, "Please look after the good council tax payers of Chorley."

Teddy Taylor: The whole House will wish to congratulate the hon. Member for Chorley (Mr. Hoyle) on being so kind to other Back Benchers who wish to speak, by making his effective point briefly. In view of the number of hon. Members who wish to speak, I hope that we will all try to do the same.
	I wish to put a basic point to the Minister about which I hope he will think carefully: although everyone accepts that the local government settlement for 2005–06 is relatively generous, it is desperately unfair to Southend-on-Sea and other seaside towns in the south-east. Procedures have been applied irrationally and unfairly, and despite Southend's massive social problems it has been obliged to cut vital public services in the fields of leisure, recreation and social services.
	The document detailing all-purpose authorities lists just under 50 authorities with a summary of their percentage increase in grant. As the Minister said, Wokingham gets a 13.2 per cent. increase. West Berkshire gets 11.3 per cent., as does Milton Keynes, and Peterborough gets 10.1 per cent. The obvious question is: what problems do those authorities face that Southend does not experience?
	Southend is a seaside town with a multitude of social problems and many houses in multiple occupation, so we have more problems than most. For example, I heard this morning that we now have 310 children in the care of the local authority. Which of the authorities that I cited experience such a problem, in addition to the problems with asylum seekers that we face? So what is the percentage for Southend? It is 4 per cent., and as I said before, I challenge the Minister to find any other all-purpose authority throughout the length and breadth of England with a lower figure. The figure is the basic amount—as low as it can go—but the basic percentage is only part of a wider story.
	We have been pursuing the question of the population level for years. Formulae have been based on the 1991 census, and Ministers have been reluctant to use the updated 2001 census figures because of the substantial changes that they could make to funding. In a letter to me dated 1 September 2004, the Minister for Local and Regional Government stated that he did not intend to use the 2001 census figure for the 2005–06 settlement. His reason was that that would provide stability and prevent big changes in funding. However, he has incorporated the basic census figures, but not the extent of the social problems detailed within that total.
	The effect on Southend has been catastrophic. The 2001 census tells us that our population has gone down from 176,000 to 160,000, but the council and I think that those figures are wholly wrong. For a start, the 2001 census excluded many addresses, and even if we ignore that basic point, our general practitioner patients figures show that there are 178,000 patients in Southend, although the Government clearly ignore 18,000 of them. When we pursued those issues with census officials, they advised us that the numbers were all part of the margin of error.
	Even if we accepted such a remarkable fall in population, which is certainly not accurate when one bears the number of asylum seekers and houses in multiple occupation in mind, the council is really infuriated that the details of the new assessed population are not taken into account in the funding formula. Even if we assume that the 2001 figures are totally correct, which we do not, they show that there has been a big increase in our elderly population, which in itself should justify an additional £1.5 million in the funding formula. How can it be fair for the Minister to bring in the basic figures, which have led to us facing a massive reduction, but not incorporate other changes, such as the increase in the elderly population that should have given us an extra £1.5 million? It seems unfair and irrational to use the 2001 figures but not include the details.
	Then we have the consequences of the unfair settlement. If a council was given a bad settlement, the logical thing would be to look for savings across the board. If the Minister looks at the figures, he will see that Southend has a budget of £197 million and spends £97 million—about half the total—on education. That is an area that the council would obviously consider cutting. However, the Government did not tell it, "You can cut back on that and other areas", but instructed it that although its increase is £5.1 million, it must spend an extra £5 million on education because of ring-fencing. As the council is obliged to spend that sum of money on education, in effect there is no increase at all. What about social services—again, a huge spender? How on earth can the council cut down on social services, given the multitude of problems faced by Southend and other seaside towns? Furthermore, some spending increases cannot be avoided—for example, the financing of pension funds for the staff, which involves an extra £1.5 million. There are many other such items.
	The Minister is obviously enjoying the conversation that he has been having with his neighbour during the past six minutes while I have been speaking, but I hope that if he cannot listen now, his officials will at least ensure that he reads about this and considers it carefully. Incidentally, although I asked for a meeting to discuss it, I was told for the first time in 40 years as a Member of Parliament that that was not possible.
	The one and only area where the council does have freedom is in leisure, recreation and arts. That has necessitated an horrendous and cruel list of cuts in vital services for the community. There are plans to close five community centres, some of which provide vital services in deprived parts of the town, and to close the Palace theatre. There is a significant and detailed plan of 12 separate cuts. As I am sure that my hon. Friend the Member for Southend, West (Mr. Amess), who attends to these matters vigorously at all times, will confirm, the council does not want to go ahead with these proposals, but what on earth is it meant to do if it wants to stay solvent?
	I appreciate that drawing up complex funding plans can be difficult, but I hope that the Minister will accept that his proposals are brutally unfair to Southend and its people. If he had time to come and visit us, he would realise that it is an area where more help is required and the needs of the community are very substantial.
	The Minister said at the beginning of his speech that he intends to bring forward some revised plans to take into account certain changes. He should bear in mind the fact that the census has denied us £1.5 million to which we are entitled and that Southend, like other seaside towns, faces massive social problems. I hope that he will think again about a settlement which, although generous overall, has done a brutally unfair service to Southend-on-Sea and caused great distress to its people, including borough councillors of all parties.

Richard Burden: I should like to say one or two things about the impact of the settlement on Birmingham and what it is likely to mean for my constituency, then draw a few conclusions in relation to the national scene.
	I welcome the settlement, which is very good for Birmingham. We have received a 6.73 per cent. increase in formula grant, which is generous by any stretch of the imagination, and is one of the better settlements in the country. Like every other town undergoing rapid change, I am sure that we could use more, and I reserve my right to come back in the future and say that we want it, but we must recognise what the Government have done for Birmingham on this occasion—in fact, not just on this occasion but following year-on-year above-inflation increases.
	We wait to see how the Conservative and Liberal Democrat coalition that now runs Birmingham reacts to this settlement. Given what Liberal Democrat Members have said on several occasions, including today, and knowing the views of some Liberal Democrats in Birmingham, I cannot understand how they have accepted the Birmingham leadership taking them into bed with the Tories, but I guess that is up to them. The focus is now on their management of Birmingham city council. They cannot claim that they have had a bad deal from the Government, though perhaps they could explain what over £4 billion of cuts under a Conservative Government would mean for them.
	I want to consider youth facilities and play facilities for younger children and the amount of money that is available for them. In my constituency, a recent report was made to the district committee—a pioneering new structure that the former Labour administration set up to devolve power and influence in Birmingham. The report highlighted what we already knew: there are not enough play facilities in my constituency. When I talked to residents on estates throughout Northfield, they emphasised the importance of improving provision for young people. We have set up a youth commission locally, with cross-party support—people of good will from different parties in Northfield all support that—to ask young people what they want.
	The previous Labour administration secured an extra £8 million of Government money for meeting various performance targets, and £7.3 million of that sum was allocated to improving facilities for young people and estate clean-up projects. It worries me that, in the past few weeks, the Tory-Liberal Democrat coalition that now runs Birmingham has decided to cut that £7.3 million from those priorities for my constituents. It claims that it has done that because it has to cope with an overspend in the social services budget.
	It is true that social services in Birmingham have longstanding problems. That is not a party issue; even the former Labour administration had a long way still to go to tackle them. However, party is important when it comes to the need to exercise proper financial monitoring and financial control throughout the year and not simply panic half way through or towards the end of the year and end up cutting the money from youth facilities, which the Tory councillors in my area—we have no Liberal Democrat councillors—say that they want to increase. The administration in Birmingham must therefore answer some questions. It cannot complain about lack of money, but it must answer questions about its management of the council.
	I want to consider the way in which spending by local authorities, other agencies and the Government translates into, for example, neighbourhood renewal. The first speech that I made in this place many years ago was about the fact that, in my constituency and many others, deprived areas exist alongside areas that are not so deprived. Consequently, when figures for deprivation are compiled at ward level, averaging occurs and so- called pockets of deprivation miss out. In Birmingham, where there are wards of 17,000 to 20,000 people, the pockets are pretty large.
	I am pleased that, last year, the basis for calculating deprivation changed to become much more local through Government action on what are called "super-output areas". Let me make a plea to my hon. Friend the Under-Secretary: can we think of another name? No one understands what the term means. However, changing the basis for calculation means that issues can be addressed and it is important that they be tackled in the context of local policy. Pockets of deprivation should be identified and their needs met when policy is decided locally. Birmingham is simply too big to try to do everything centrally and dealing with deprivation locally is therefore especially important.
	Devolution has made a good start in Birmingham. There are local projects, such as safer neighbourhood projects, in my area that have an impact on tackling crime and antisocial behaviour. However, the money needs to reach local level to back up those good initiatives.
	Much estate development work is happening in Northfield. In the medium term, the prospect of that is good. However, in the short term, people cannot get their repairs done. It is galling for someone who sits on the edge of an estate and sees that another person's home is scheduled for redevelopment to know that their home is not and to be unable even to get repairs done. More local control of matters such as repairs budgets is important and of more than academic significance. I ask my hon. Friend to consider what the Government can do to encourage that process locally.
	I have written to the city council about all the issues that I have raised but I ask my hon. Friend the Under-Secretary to consider how the Government can encourage such processes. The grant figures that have been announced and that we are debating are good, but the way in which they are used locally is vital. We need to tackle that in Birmingham.

Hugo Swire: There seems to be a growing consensus, at least on the Government Benches, that this is a fair and generous settlement. Perhaps that is to be expected, but it is not a sentiment that I acknowledge or recognise; nor is it shared by my constituents in East Devon—[Interruption.] The Minister says that it is a shame. It is; or perhaps not, if we take into account what many of my councillors and constituents believe: that the settlement is merely the latest instalment in the Government's determination to drive through a regional agenda and to undermine local government infrastructure so that it becomes unpopular. Perhaps they could then replace it with a unitary authority in advance of their regional programme.
	East Devon district council has been debt free for many years, with capital reserves of about £20 million. However, it is now being encouraged to spend that money. The Government do not want any council to be debt free, because they could not then insist on that council complying with their ever increasing number of directives.
	We have heard a lot about a replacement for council tax, and that is an entirely legitimate discussion to have. I commend any Government who want value for money. Building on the Gershon report, the James report has also identified great waste. All Governments have a duty to ensure that they deliver value for money to the taxpayer. I have looked into the possibility of a local income tax. On the surface, it would have some attraction in a constituency such as mine with very high property values and a high pensioner population. However, on reflection, and after much study, I have concluded that any fair means of raising local council tax has to retain an element of property valuation.
	Over the past seven or eight years, there has undoubtedly been a shift from central Government providing the funding for local government to local government having to find increasingly large amounts for itself. The Government's announcement that they are likely to cap local councils is only to be expected in the run-up to a general election. No Government holding an election in May or even sooner would want to have it on the back of council taxes increasing as they have done in the past few years.
	Furthermore, capping involving a blanket figure is manifestly unfair. East Devon is the lowest-charging council in Devon. To apply the same maximum increment to East Devon as to the others will continue to make the gap in its overall receipts much wider, while its statutory responsibilities remain exactly the same as those of any other council. Where would be the incentive to be prudent and to deliver value for money, as East Devon does? It has the lowest council tax in Devon, as I have said: the average charge for a band D property is £102.09, compared with the county average of £124.33. Where would be the incentive for a district council to behave in a manifestly honourable way, and to deliver good value for money? The answer is that there would be none. Nothing in the settlement—or nothing that we have heard this evening—would contribute towards remedying that.
	East Devon has been judged by the Audit Commission, and it achieved a good rating while continuing to give the best value for money. However, the council tax now pays for only about 23 per cent. of the £24.5 million needed to provide the necessary services. As the Government have withdrawn their funding, local authorities such as East Devon have been boxed in, in terms of finding the deficit funding. They are faced with a simple equation. In order to keep the increment down, they have to reduce what they do.
	This Government over the past few years have increased the statutory requirement on local government year on year. Local government has no option but to perform to those new targets. What does that leave? It leaves a district council faced with having to cut those non-statutory responsibilities. That is what is happening in East Devon: the double whammy of a council tax increase and a cut in services. I do not blame the council for that—it has performed extremely well. It provides good value and has some exciting projects such as the regeneration of Exmouth and Seaton, and bringing its remaining housing stock up to standard to meet the statutory requirement.
	All those things are positive, but equally the Government must accept responsibility for the crisis that they find themselves in. I shall use technology as an example of the additional work that councils have to do without receiving financial compensation for doing it. The Government require East Devon to invest between £4 million and £5 million by the end of this year, but what is their contribution? It is £1 million, so the deficit in respect of that requirement alone will be £3 million or £4 million. Also, the cost of recycling in East Devon next year will be about £1.5 million. Where will that come from?
	On reflection, what do we face? The council has the lowest grant in the country, and 75 per cent. of the council tax money, which we have been using to prop up our precept over the years, is to be confiscated from East Devon and redistributed around the country. That is the crisis we face.
	I want quickly to touch again on the Liberal Democrat plan to replace council tax with a local income tax. I was intrigued to see a letter in the Express and Echo of 25 January from Councillor Margaret Rogers, a Liberal Democrat councillor in my constituency, pointing out that I have misunderstood the Liberal Democrat plans for a local income tax and inviting those taking part in the Sidmouth Town ward by-election to
	"try to understand the correct facts about local income tax."
	Well, I think they did understand those facts, because 57 per cent. of them voted for a Conservative councillor. That proved to Margaret Rogers that they understand the Liberal Democrat alternatives.
	It is worth pointing it out to the Liberal Democrats that they cannot have it all ways. They cannot say they want to abolish council tax and yet vote on two separate occasions to reband houses under the council tax.
	There is much that I want to say—much that I hope to have another opportunity to say—about the unfair settlement that we face, but other hon. Members wish to speak. I urge the Government, therefore, to look again at those councils that are delivering good value for money, such as East Devon.

Gordon Prentice: Other colleagues want to speak, so I shall be brief. Although I do not want to be the only person to spoil the party on this side of the House, there are certain things that I want and need to say.
	The 6.6 per cent. increase for Pendle is welcome and we need it. Pendle is a deprived area, sitting next door to Burnley, with a huge number of social problems that need to be tackled, but our difficulty goes back to the introduction of the new formula grant system in 2003–04. It has produced such a situation—my hon. Friend the Member for Chorley (Mr. Hoyle) outlined this—that money that should come to Pendle and other district councils in Lancashire, and indeed across the country, is being withheld.
	As the right hon. Member for Skipton and Ripon (Mr. Curry) said, the introduction of the new formula grant system has a purpose. That purpose is to redistribute resources to those parts of the country that need the extra money. The perversity is that, three years into the new system, a lot of resources that should come to local authorities in Lancashire such as Pendle, Chorley, Burnley and Hyndburn have been withheld. We are talking about significant sums, and we are entering the third year of transition. Pendle borough council is waiting—I do not know whether we will ever get it—for £1.8 million that would have come to it had the new formula grant system been applied. My hon. Friend the Member for Chorley spoke earlier about the £1.3 million that would have gone to Chorley; my hon. Friend the Member for Burnley (Mr. Pike) spoke earlier about the £1.5 million withheld from Burnley, with all its problems; my hon. Friend the Member for Hyndburn (Mr. Pope) spoke about the £1.5 million withheld; and so it goes on.
	Those are significant sums. For a small district council such as Pendle, whose budget comes in at about £13 million, £1.8 million is significant, so while we celebrate the 6.6 per cent. increase, we want to know when we will get the money that was promised to us as a result of the move over to the new funding system. It is all a question of fairness and giving local authorities the resources that they need to tackle the problems that we face.
	The Under-Secretary will say, I am sure, that there is not a big pot of cash somewhere that we can raid. He will say, I am sure, that the money must be used to ease the pain of the losers under the new system, and that we must let the losers down gently. The Minister for Local and Regional Government told us at the beginning of the debate that one of the losing authorities is Preston in Lancashire. It is totally unacceptable, however, that local authorities such as Pendle, Chorley and Burnley—for God's sake—should be bailing out local authorities such as Preston. That is the reality. It is the Government who should ensure that local authorities such as Preston do not go into financial free fall, not local authorities such as mine which should gain from the new financial system.
	I want to finish on the Liberal Democrats and local income tax. My hon. Friend the Member for Normanton (Mr. O'Brien) tried to coax some information out of Liberal Democrat Members about how that would work in practice, but got absolutely nowhere. Local income tax is an idea that is shrouded in mist. When we try to get details about how this local income tax would work in practice, those details are not forthcoming. We heard today from one Liberal Democrat Member that all sorts of tiers would be able to vary the rate of local income tax—not just county councils or district councils, but parish councils.

Edward Davey: Will the hon. Gentleman give way?

Gordon Prentice: Not unless the hon. Gentleman wants to correct that for the record. That did not relate to council tax but specifically to local income tax. The cost of administering such a byzantine system is ludicrous. If the hon. Gentleman, who calls himself an expert on such matters, wants to intervene and tell me that I am wrong, I would welcome that.

Edward Davey: I am more than happy to intervene. We have published a huge amount of details on local income tax and how it would work, dealing with all those issues. The hon. Member for Normanton (Mr. O'Brien) refused to allow us to intervene to answer the question that he posed. The hon. Gentleman is therefore completely wrong, again.

Gordon Prentice: That was a complete non-answer. I invite the Liberal Democrats to initiate an Opposition day debate on local income tax. Let us discuss it in detail then.
	Let me return to the point I made earlier about the sums that have been withheld as a result of the introduction of the new grant system. My hon. Friend the Member for Chorley said that the cost would be only £29 million nationwide. That is de minimis in the context of the Government's budget: it is absolutely nothing. To right the injustices in Lancashire, a derisory £9 million would be required.
	I do not know what the answer is. I know that my right hon. Friend the Minister has a busy schedule, but like the hon. Member for Rochford and Southend, East (Sir Teddy Taylor) I tried to arrange a meeting with him and was astonished that his diary was so full that he could not meet me—along with representatives of the six local authorities in Lancashire that are wrestling with this problem. I hope that the Under-Secretary will be able to give some comfort to local authorities such as Pendle that need resources that are being unfairly withheld from us.

David Amess: A year ago I initiated an Adjournment debate entitled "Southend Borough Council (Financial Settlement)", to which the Under-Secretary replied. Sadly, many of the points that I made then are still pertinent this evening.
	Southend borough council is an extremely well run local authority, and I pay tribute to all the women and men who work for it, but unless the Government do something to help it in its present financial crisis, services will be decimated in the town of Southend—and let there be no doubt that if that happens the Government will be entirely to blame.

Nick Raynsford: That is total nonsense.

David Amess: It is not. I will come to the Minister's remark in a moment.
	When I first arrived in Southend, the authority had decided to become unitary. At first that worked extremely well financially, but unfortunately—as the Minister of State knows only too well—it has recently not been to the authority's financial advantage.
	In Southend we had many brilliant leaders of our council. Norman Harris and Norman Clarke, for instance, are well known as local government pioneers. The leaders who have followed those two gentlemen are every bit as able, but because of the Government's continual interference with local government, they have not been able to develop Southend as they would have liked to. Last year Southend borough council had to make savings of £7 million to bring spending levels down to the formula spending share, and council tax increased by 6.8 per cent.
	I would have expected the Under-Secretary to listen to the points I made a year ago about the census. If the Minister of State had allowed me to intervene when he opened the debate—

Nick Raynsford: indicated dissent.

David Amess: The Minister of State is wrong. I am the only Member to whom he did not give way. All I wanted to ask was, would he please meet a delegation from Southend to discuss issues relating to the census? In the 22 years for which I have been a Member of Parliament—I have listened to many of his speeches—it has always been common courtesy to see delegations led by Members of Parliament. I think it very regrettable that he is not prepared to meet a delegation from Southend to discuss the census.

Nick Raynsford: I am sorry that the hon. Gentleman has not understood something that I have explained on several occasions. In a year in which there is no change to the formula and it is therefore not possible to respond for requests for changes of the kind that he and his colleagues sought, it is not right for us to see delegations from some areas and not others. When we accept delegations, we always accept the principle that any local authority that wishes to come and see us is free to do so. We made it quite clear this year that because there were no formula changes we would not see individual delegations from individual authorities but would accept delegations from bodies representing local government—and we did see members of a body representing unitary authorities on which Southend was represented. It is simply not the case that we have not listened to Southend's views.

David Amess: It certainly is the case that the Minister of State has not listened, because he is pre-judging the meeting that would take place. During his opening remarks, he agreed to meet one of his hon. Friends on a specific issue. I ask him to reconsider his decision not to meet a delegation from Southend, because the impact of having 20,000 fewer people on the census than there actually are is tragic in financial terms.
	The Minister of State may laugh, but there is nothing funny about the issue. I represent a huge number of elderly people. In fact, my constituency has more people aged between 100 and 120 than any other—[Interruption.] Sorry, between 100 and 112; I was slightly exaggerating. Florence Reeves is the eldest.
	Unless the Minister of State meets a delegation and listens to what we have to say, there will be further cuts of £5 million, which will mean redundancies, restructuring of services, withdrawal of free school transport to voluntary-aided schools, with the exception of the transport for disadvantaged children, a reduction in school uniform grants to children from disadvantaged families, closure of the Palace theatre, closure of community centres, closure of a mobile library, a reduction in park ranger services, a reduction in grounds maintenance, the withdrawal of all bus route subsidies for elderly people, and a 3 per cent. increase in charges for Southend borough council services.
	It actually gets worse than that. Because there is likely to be a council tax increase of over 9 per cent. and the Government will cap it, there will have to be another £2 million of cuts. A number of libraries will be closed. The boat patrol will be cut. There will be a further 2 per cent. increase in charges for Southend borough council services. All non-statutory services will be abolished and there will possibly be even more redundancies.

Nick Raynsford: indicated dissent.

David Amess: It is no good the Minister of State shaking his head. I have been overwhelmed by the number of local residents who have made telephone calls. There has been a rally. I have received umpteen letters. Misery is being piled on the good residents of Southend because the Government will not listen to the points that the local authority is making about the census. I ask the Minister of State not to behave churlishly and to reconsider meeting a small deputation.

Tony Clarke: The need for brevity will perhaps lead me to be less courteous than I would like to be in my comments, but I start by congratulating my right hon. Friend the Minister and his team on delivering the eighth consecutive inflation-plus rise to local government since the Government came to office. I say that with all sincerity. Those of us who served in local government before coming to the House remember the rises below inflation that were delivered year on year to local government by the Conservatives. However, I say to him sincerely how dissatisfied we are in Northampton with the settlement. He will remember that when he gave the figure in November, I questioned his language because he said that he had listened very carefully to the needs of those in growth areas, yet he delivered to Northampton borough council a settlement of 2.7 per cent., compared with settlements in neighbouring districts of 10.5 per cent. for East Northamptonshire district council and 7.4 per cent. for Wellingborough borough council. There seems to be an imbalance between the amount given to them and that given to Northampton borough council, which will have to take on a lot of that growth.
	I blow to pieces the assertion of the hon. Member for Brentwood and Ongar (Mr. Pickles) that this is some sort of class war or that we are taking a partisan approach. I am here representing—or trying to—the needs of a Conservative-led administration in Northampton not because it deserves it, but because it is unfair that it be required to cut back substantially on the services that it offers.
	I take the point made earlier that rather than looking for savings across the board, local authorities tend to go just for the big figures in the hope that they can cut out the fat. Conservative-led Northampton borough council is making a right hash of trying to ensure that it achieves the figure that it is supposed to achieve. It is making some incredible mistakes, such as offering its leisure centres to private management, with no thought as to whether anybody wants to purchase them. That is supposed to be achieved before March, but we all know that it will not be possible. It is increasing car parking charges, increasing charges for leisure services across the board and increasing cemetery charges by 10 per cent., which proves that even the cost of dying goes up under a Conservative-led council.
	There is a further staggering initiative that I did not believe when I first heard it. The council is introducing a £12 charge for the collection of large items from outside people's houses, such as fridges and furniture. I suppose that there is nothing wrong with that in itself, although it should be noted that an increase from zero to £12 is huge. The council says that those who pay the £12 can have their large item picked up within a week, but only last week it announced that dealing with fly-tipping was one of its priorities and that any fly-tipped item would be picked up within 24 hours. So under a Conservative-led council, lawful citizens of Northampton can pay £12 to have their items collected within a week, while others can dump them outside, phone them in as fly-tipped and have them picked up within 24 hours. That is the level of competence that we are dealing with in Northampton, against the backdrop of a very poor settlement. [Interruption.] It is a Conservative-led council, under which the cost of dying goes up by 10 per cent.
	I want my right hon. Friend the Minister to take this issue seriously. In November, the Lords Select Committee on the West Northamptonshire Development Corporation looked very seriously at the Office of the Deputy Prime Minister's record in consulting on the imposition of an urban development corporation for west Northamptonshire. We are having a hard time convincing our electorate that it is good for them, and it is even harder to do so when we are asked to deliver growth against the backdrop of a 2.7 per cent. settlement that is in no way adequate for what is the largest non-unitary council in the country. It should be unitary, and the right hon. Member for Suffolk, Coastal (Mr. Gummer)—he is not in the House today—admitted that the previous Conservative Government made a mistake in that regard. I ask my right hon. Friend to start correcting some of these wrongs. Let us make sure that Northampton does become a unitary council and that it can deliver growth. But let us also ensure that the Government and the ODPM take seriously the need to treat us fairly. Then, we can bat on their side, rather than suggesting that the figure granted to us is wrong.

Michael Foster: I am grateful for being called, Madam Deputy Speaker, and grateful to my colleagues for being brief, thereby enabling me to be the final Back-Bench contributor this evening. It would be churlish of me not to congratulate the Government on another generous settlement for Worcestershire this year. I do not want my comments on what I regard as an inconsistency in the local government funding formula to be taken in the wrong way. I want to tackle the long-standing issue of the area cost adjustment, which my colleagues on the Front Bench know all about. The Government have not yet dealt with it, and it is causing much disquiet among my constituents.
	I want to deal briefly with how this inconsistency arises by looking at the example of the education formula spending share. The EFSS has an element of top-up under the category of deprivation, and the three deprivation factors used—income support-level claimants, low-achieving resident ethnic minorities, and working tax credit claimants—are all residence-based. However, in calculating the area cost adjustment, instead of using average earnings according to a residence-based criterion, a workplace-based criterion is used.
	What does that mean for my constituents? Some of the deprived, low-earning areas in the west midlands conurbation rightly qualify for additional top-ups for deprivation, but some of them also qualify for a top-up for high earnings under the area cost adjustment scheme, because the Government use work-based qualifications to assess average earnings.
	How the system hurts Worcestershire so much can be seen in the latest local council figures, particularly in the comparison between residence-based earnings and work-based earnings in the west midlands region. Unsurprisingly, Solihull is the highest on both the residence and work-based criteria and receives the area cost adjustment. Warwickshire is the second highest on residence-based earnings, third highest on work-based earnings and also receives the area cost adjustment. Worcestershire is the third highest authority with respect to residence-based earnings, but only the eighth highest when it comes to workplace earnings and it does not qualify for area cost adjustment. It is the inconsistency between residence-based qualifications and workplace-based qualifications that I want the Government to address by making changes to the funding formula.
	What adds insult to injury is the fact that some areas within the west midlands conurbation have lower earnings on the work-based criteria than Worcestershire—in theory, they should not qualify for area cost adjustment—but because the Government recognise the large grouping of the west midlands conurbation, those areas end up benefiting from the area cost adjustment, even on the flawed basis adopted by the Government.
	In conclusion, I am grateful for the opportunity to make a brief comment on the area cost adjustment and I urge the Government to look carefully at the Blanchflower-Oswald report on area cost adjustment. When the changes are made, I urge the Government to consider carefully their impact on places such as Worcestershire, which seem to suffer on both the work and residence-based criteria for local government funding.

Phil Hope: We have had an interesting and lively debate, though we have occasionally witnessed what I think could be described as tired and emotional interventions from the Opposition Whips. We have, I think, dealt with them. We have heard a variety of views about the adequacy of the total grant settlement proposed for next year.
	The views expressed have included a welcome from my hon. Friends the Members for Sheffield, Attercliffe (Mr. Betts), for Chorley (Mr. Hoyle) and for Normanton (Mr. O'Brien), who all referred to a "generous" settlement for the forthcoming financial year. The right hon. Member for Skipton and Ripon (Mr. Curry), who is no longer in his place, described it as the best settlement of the decade—and we have not yet reached the end of it, Madam Deputy Speaker, so we are clearly doing extremely well. I am pleased to see that our debate on the Government's substantially generous and good settlement for local government has, perhaps with only one exception, been positive. We want local government to provide better, more efficient and more effective services in the next financial year.
	We have also heard Members propose some novel and ingenious methods for distributing the total differently. The area cost adjustment was mentioned a few moments ago. Other subjects mentioned included census figures, amending reports, the question of stability versus turbulence, redistributing rebates and even a discussion of super output areas and pockets of deprivation. Interestingly, if not perhaps coincidentally, the changes advocated by different Members would benefit their own constituents and their local authorities. That is par for the course.
	It always amazes me that Conservative Members stand up and demand more money for their councils at the same time as supporting a manifesto commitment not just to freeze spending on local government, but to make massive cuts of some £4.8 billion to the Office of the Deputy Prime Minister budget.

Eric Pickles: rose—

Phil Hope: Let me remind the hon. Gentleman before he stands up that we have had interventions from Tories such as the hon. Members for Altrincham and Sale, West (Mr. Brady), for Rochford and Southend, East (Sir Teddy Taylor), for Beckenham (Mrs. Lait), for Runnymede and Weybridge (Mr. Hammond) and for Upminster (Angela Watkinson), the right hon. Member for Skipton and Ripon, the hon. Members for East Devon (Mr. Swire) and for Southend, West (Mr. Amess), all of whom have complained about insufficient funds for their local councils. It is entirely acceptable for right hon. and hon. Members to champion the councils in their constituencies, but they cannot do so while at the same time supporting a manifesto commitment that would clearly cut funding to their own councils.

Eric Pickles: The Minister must be clear about Conservative policies. We are saying, clearly and unambiguously, that we will protect education, health and the police service. In addition, we guarantee that local authorities will get, at the very minimum, an increase that will protect them against inflation. On top of that, we have identified £1 billion in savings that local authorities will be free to use as they choose. Councils will be removed from the shackles of control that the Government impose on them.

Phil Hope: We have just heard an Alice in Wonderland contribution from the hon. Gentleman. His fantasy world will not be tolerated in this House. My hon. Friend the Member for Sheffield, Attercliffe specifically asked about waste and housing. The Opposition are proposing cuts of £35 billion in public services, part of which is a cut of £1 billion in housing.

Hugo Swire: Will the Minister give way?

Phil Hope: That would mean fewer affordable homes for the sons and daughters of all constituents in London and the south-east.

Hugo Swire: Will the Minister give way?

Madam Deputy Speaker: Order. The Minister will indicate when he is willing to give way.

Phil Hope: I will give way to the hon. Gentleman, as I said earlier that I would do so.

Hugo Swire: I am grateful to the Minister, as he mentioned me in his list of Opposition Members. Does he understand that if the Government stopped insisting that local councils must meet so many targets, and if they also abandoned their policy of taking 75 per cent. of capital receipts from the sale of remaining housing stock, East Devon district council would not need any more money?

Phil Hope: I may be wrong, but I think that it is the Conservative party's policy to sell off housing association stock under the right-to-buy scheme. That would strip out all affordable housing for people on low incomes. The hon. Gentleman cannot make an intervention like that and think that he can get away with it.
	The Opposition ask for money and then whinge about council tax rises. I remind the House that, on average, Tory councils raised council tax last year by 5.4 per cent. That is in sharp contrast to the rises imposed by Labour councils of an average of 4.7 per cent. For far too long, Tory councils have hiked council tax and then sent their local MPs to Parliament to blame the Government. Neither we nor the electorate are fooled. Opposition Members would be better advised to use their time persuading their authorities to keep council tax levels down.
	I turn now to the Liberal Democrats. I was interested to hear the hon. Member for Kingston and Surbiton (Mr. Davey) say that the Labour Government have made Britain a fairer society. I am grateful for that generous recognition of what we have done over the past eight years to support our poorest people. After that welcome contribution, however, he then trotted out more details of the Liberal Democrats' proposals to replace council tax with their uncosted, unworkable and unfair local income tax.
	My hon. Friend the Member for Sheffield, Attercliffe reminded the House about the loophole in the Liberal Democrats' schemes that means that the very wealthy would pay no local income tax at all. My hon. Friend the Member for Normanton pointed out that, when challenged, the Liberal Democrats refuse to define their policies, which do not stand up to scrutiny. They do not want to be reminded of the policies that they would pursue because they do not want us to remind the electorate of the record increases in local government funding that this Government have made. In addition, they want to distract attention away from the record of Liberal Democrat councils, which last year raised council tax by the largest amount—5.8 per cent. on average.
	The Liberal Democrats were challenged too by my hon. Friend the Member for North Durham (Mr. Jones), who said that they had announced, during the Brent, East by-election, that they would give pensioners vouchers worth £100. Those of us who worked the streets in that election remember that promise. However, as soon as the election was over the £100 voucher disappeared. Moreover, I remind the House that this Labour Government have made available £100 for every household with a pensioner over 70. That money is in pensioners' pockets now, and is helping pay the cost of local council tax.
	The Liberal Democrats then described their daft proposals, which would remove the need for council tax revaluation. Their so-called research has created headlines that are factually wrong—ludicrously so. Those headlines, in newspapers such as the Daily Mail and the Evening Standard, reveal how ill informed, ignorant and, frankly, how stupid the Liberal Democrats really are.
	Let me repeat what I and my right hon. Friend the Minister have said many times in this House. The revaluation does not mean that individuals will pay more council tax just because their house has gone up in value. The council tax for their house will depend largely on how much their property has increased in value compared with the average. If their property has increased in value in line with the average, it will not go up a band. Even properties that have increased in value by more than the average will not necessarily move up a band if they are currently valued towards the bottom of an existing band. Yes, some properties may go into a higher band, but many will stay in the same band and some will go into a lower band and pay less council tax.
	The crucial point is that the revaluation will not increase the amount of money raised overall from council tax, because we have made that commitment. Ignorant speculation like today's that a fairer council tax system will lead to huge increases in council tax is simply untrue. The hon. Member for Kingston and Surbiton quotes the example of Wales, but it has been made clear that it is not a parallel model and cannot be read across to England. Interestingly, by the way, it was Conservative and Liberal Democrat Assembly Members in Wales who voted in favour of the banding system that Wales has introduced.
	We have had contributions from various individual Members and I shall make a few comments in response. My hon. Friend the Member for Normanton emphasised the importance of spending on liveability, and he was right to do so. As MPs, we know from our surgeries that people are concerned about how clean, how safe and how green their communities are. We are doing much to support local government to provide better services in their areas. The Clean Neighbourhoods and Environment Bill, in particular, contains measures to increase the liveability of local communities. A recent MORI poll pointed out that the track record has greatly improved in recent years.
	My hon. Friends the Members for Chorley and for Pendle (Mr. Prentice) asked us to look again at how the floors operate. I wish to emphasise that no money has been withheld—my hon. Friend the Member for Pendle was right to say that—because the money has been distributed to pay for the floor to help councils such as Preston. We understand the concerns that my hon. Friends raised. The formula is being reviewed and we will want to look at those questions, but stability in local government funding is also important. We have to get that right.

Lindsay Hoyle: Will my hon. Friend give way?

Phil Hope: No, because time is running short.
	My hon. Friend the Member for Birmingham, Northfield (Richard Burden) welcomed the generous settlement that Birmingham is to receive, but he made the clear point that it is only good money if it is spent well. He has been a real champion for his constituency in standing up for youth and play facilities. I hope that the Conservative-Liberal Democrat coalition that runs the council in Birmingham gets the decision right, to ensure that facilities are protected for young people.
	My hon. Friend the Member for Worcester (Mr. Foster), whom I have met on many occasions to discuss the particular issue that he raised—[Hon. Members: "Oh!"] I should emphasise that the meetings were not about this particular settlement. We are not making any changes to the way in which we calculate the area cost adjustment during this formula freeze, but we will listen carefully to my hon. Friend's representations, and those from other hon. Members, about the ACA in the future.
	The hon. Member for East Devon made a point about what appeared to be a regional plot and then mentioned the James review. As he knows, the James review is not about savings, but about savage cuts to local government.
	There will never be a local government settlement that is universally welcomed, but if there were to be such a mythical beast, it would look pretty much like this year's settlement. It includes an increase in formula grant of £2.6 billion, or 5.6 per cent. All councils will receive a formula grant increase at least in line with inflation, with extra on top from specific grants. As my hon. Friend the Member for Northampton, South (Mr. Clarke) said, the settlement builds on sustained grant increases over the years since 1997. The choice is clear. Do people want massive Conservative cuts in grants to councils, followed by the inevitably huge increases in council tax, an uncosted, unworkable and unfair local tax system that would mean a massive increase in income tax, or this settlement, which is a good deal for local government and for the council tax payer?
	It being six hours after the commencement of proceedings on the first motion relating to Police Grant Report (England and Wales)] Madam Deputy Speaker put the Question, pursuant to Order [this day].
	Question agreed to.
	Resolved,
	That the Local Government Finance Report (England) 2003–04: Amending Report 2005, HC 241, a copy of which was laid before this House on 27th January, be approved.
	Madam Deputy Speaker then put the remaining Question required to be put at that hour.

LOCAL GOVERNMENT FINANCE

Resolved,
	That the Local Government Finance Report (England) 2005–06, HC 242, a copy of which was laid before this House on 27th January, be approved.—[Gillian Merron.]

PUNJABI COMMUNITY

Motion made, and Question put, That this House do now adjourn.—[Gillian Merron.]

Rob Marris: I welcome my hon. Friend the Minister. I know that she takes a great interest in the Punjabi community in the UK and is very knowledgeable about it, as are many right hon. and hon. Members.
	Since I was elected to Parliament almost four years ago, I have had the honour and pleasure of being treasurer of the all-party parliamentary group, Panjabis in Britain. As the Minister and other hon. Members know, Wolverhampton has a large and successful Punjabi community, which is an integral part of our city. In my constituency there are four gurdwaras, five mosques, one Buddhist vihara and one Hindu temple. There is also another Hindu temple just 30 m across the boundary. One example of the outward-looking and generous nature of the community is the fact that Sikhs, Ravidassi, Muslims and Buddhists in Wolverhampton have so far raised about £100,000 for the tsunami appeal.
	Wolverhampton's diverse communities are one of the many strengths of our great city, and we all work hard together successfully to build and maintain good community relations—a far cry from the situation that existed when my predecessor Enoch Powell was the local Conservative Member of Parliament.
	Punjab, as many Members will know, was divided by partition in 1947; part of it is in India and part in Pakistan. Indeed, I believe that Pakistan is an acronym in which the P stands for Punjab. There are many Sikh holy sites in Pakistan, most notably the birthplace of Guru Nanak. The large Punjabi community in the UK originates from both sides of the border. The biggest proportion of that community consists of Sikhs, who number about 700,000 in the UK.
	I paid a private visit to Punjab last October. Because some people have questioned me about that, I make it clear that I paid for the visit myself. I was keen to learn more about Punjab—and what a wonderful experience! I very much hope to go there again. I visited Amritsar, where of course one finds the Golden Temple complex, and within that the Golden Temple itself, the Harmandar Sahib. I visited Chandigarh, the state capital. Both the state legislature and the city itself were designed and built by Le Corbusier in the 1950s; it is a modern city. I visited the ancient city of Anandpur Sahib, the birthplace of the Sikh Khalsa in 1699. I also visited Jalandhar, a bustling commercial city and the centre of the district from which many Punjabi families in Wolverhampton originate.
	I take this opportunity to congratulate the UK Government on opening a visa screening office in Jalandhar about 18 months ago. It is run by a subsidiary of Kuoni Travel. I visited the office and spoke to the staff; it is an impressive facility.
	It is important when talking about the Punjabi community in the UK to stress that their principal concerns are similar to those of most other people in the UK: a stable economy, jobs, rights at work, support for families and pensioners, and continued investment in public services such as the NHS and education. However, there are certain specific issues facing Punjabi communities in the UK, and I shall touch on a few of those.
	The first is pension credit. My hon. Friend the Minister will no doubt be aware of early-day motion 1730, tabled in the last Session by my hon. Friend the Member for Kingswood (Mr. Berry). To maintain links with their families, many Asian-English pensioners return to the subcontinent for several weeks each year. However, pension credit recipients who are abroad for more than four weeks have to reapply for pension credit on their return home to the UK. Thirteen weeks, as called for in the motion, would be a much more appropriate interval. Will the Government consider changing that rule?

Khalid Mahmood: My hon. Friend gave an approximate figure for the number of Sikhs in this country, and rightly raised the issue of services for the community. Does he agree that the Sikh community should be included in the census figures, so that we can be sure that we have the right figures to determine what service provision is needed?

Rob Marris: I agree with my hon. Friend. I intended to deal with that point. I and many other right hon. and hon. Members support the call for the separate monitoring of Sikhs in the United Kingdom census. That has cross-party support. Since 1982, following the Mandla case involving a schoolboy, Sikhs have been recognised under the race relations legislation as a separate race within the United Kingdom for those purposes. We need separate monitoring to discover the demographic profile and to help to target the provision of services. Do the Government support the separate monitoring of Sikhs in the United Kingdom census?
	To help provide appropriate services, we need both separate monitoring and consultation with the Punjabi communities in the UK. What mechanisms are there for ensuring that the diverse views of the Punjabi communities are taken into account by Government? What steps are the Government taking to encourage an increase in the number of appointments of members of the Punjabi communities, especially women, to local and national decision-making bodies?
	I draw the Minister's attention to early-day motion 464, which I tabled, regarding English language proficiency for Sikh priests. A similar early-day motion was tabled by the hon. Member for Brent, East (Sarah Teather) regarding English language proficiency tests for Hindu priests. That is a live issue in the Punjabi communities in the UK. The rules were changed last August, to the effect that a priest applying for a visa to come to work in the United Kingdom as a religious office holder must have level 4 proficiency in English. Under the current arrangements, that will be raised in time to level 6 proficiency in English, which is proficiency in reading, writing and speaking English.
	Ironically, about 18 months ago the Ramgarhia board gurdwara in my constituency was initially refused entry for a priest. The reason given was that he spoke English too well, and the entry clearance officer feared the priest might disappear once he had arrived in the UK. His application was allowed on appeal, and I can reassure the Minister that I saw him last Sunday. He is still working at the gurdwara and doing a fine job.
	I understand the desire to encourage the use of home-grown priests who speak English as a means of helping to pass on culture and beliefs to the younger generation. That is a matter for the temples to decide. However, no Government should seek to dictate the language in which a religion is practised in our country. That is a private matter for the followers of that religion. I urge the Government to think again, particularly about priests on short-term visas.
	As hon. Members know, Vaisakhi is a Punjabi lunar harvest festival, which is usually celebrated in April. I am pleased that it is now celebrated by the Government, with a reception at the Foreign and Commonwealth Office last year, which I attended and at which the Minister spoke. In Wolverhampton Vaisakhi has grown into a big event for the whole city, not just for Sikhs, with a relaxed and festive march ending in West park in my constituency. The event is run by the Wolverhampton Council of Sikh Gurdwaras, led by the very able and committed Dr. Sadhu Singh. However, there are problems every year with getting police agreement for road closures and so on. Will the Government please issue guidance on such matters? What Government support is there nationally for Vaisakhi celebrations?
	On faith schools, I know that the Minister is familiar with the Sikh secondary school in Hayes, adjacent to her constituency. I understand that a Sikh primary school is being built in Hayes. What further Government support will there be for faith schools?
	Most Sikh men and women carry a kirpan as a sign oftheir faith. Too often, it is misunderstood. Wolverhampton local education authority has issued very good guidance on the matter for schools. A kirpan is a ceremonial knife, one of the five Ks of Sikhism. It is never used aggressively. As far as I am aware, there has never been an incident in the United Kingdom of a Sikh using his or her kirpan aggressively. What progress has been made on the issue of the wearing of kirpans by Sikh employees in restricted areas at UK airports?
	Some hon. Members will know of the case of Mr. Fauja Singh, who is a marathon runner. He is in his 90s and he runs the London marathon. Because of his athletic prowess, he was invited to the London Eye for a celebration. When he got there, he was refused entry because, understandably, he refused to remove his kirpan—he is a devout Sikh. What steps are the Government taking to widen knowledge of the importance of the kirpan and the sensitivities surrounding it?
	In France last year the wearing of religious symbols in French schools, such as the hijab or the turban, was banned. That is of concern to the Punjabi communities in the United Kingdom, because the UK and France are both part of the European Union. I should like to know what representations the UK Government have made to the Government of France and to the EU on the issue.
	The final issue of concern to the Punjabi communities in the UK that I want to raise tonight is that of human rights. Hon. Members will remember Operation Bluestar in June 1984, when the Golden Temple complex was stormed by the Indian army. I tabled early-day motion 664 in the last Session on that issue. It was followed in November 1984 by the pogroms, particularly against Sikhs, in Delhi and elsewhere in India. I tabled early-day motion 662 on that issue in the last Session.
	Those outrages and human rights abuses, which continued for many years when the Indian part of Punjab was in fact closed, were never properly investigated. There has never been a proper independent investigation. As far as I am aware, no criminal charges have ever been brought against, for example, any police officer, for well documented cases when, to put it mildly, the police stepped out of line. What further pressures are the UK Government and the EU bringing to bear on the Government of India for a proper investigation and, where appropriate, for proper criminal charges to be brought and convictions secured, particularly against police officers, for those human rights abuses in June and November 1984 and for many years after that?
	On a happier note, I invite the Minister to attend the all-party parliamentary group Panjabis in Britain public meeting to be held here at the House of Commons in Committee Room 10 on Wednesday 9 March from 3 pm until 5 pm. I know that the Minister is extremely busy, but I hope that she will find time to come to that event.

Fiona Mactaggart: I thank my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) for raising this subject tonight. I am familiar with his work on the all-party group. We have regularly attended meetings of the group together since he has been a Member of Parliament. I know that many of the themes of his contribution were informed by the work of that group.
	I was pleased by my hon. Friend's reference to the substantial contribution that the Punjabi community, and specifically the Sikh community, have made to our wider society. I am looking forward to Sunday when I am going to a gurdwara in my constituency, and part of what I shall be doing there is receiving a very generous cheque from the community for the victims of the tsunami.
	My hon. Friend referred to the visa screening unit at Jalandhar, the existence of which is largely to do with the work of the all-party group.
	My hon. Friend managed in a short time to get through a large amount of territory, and I hope that I will give all the issues that he raised a proper airing and response. I hope that he will forgive me if I fail to deal with everything fully, but I am slightly daunted by the range of his contribution.
	The first issue that he addressed was pension credits. Currently, people who journey abroad for more than four weeks need to reapply for pension credit on their return. As my hon. Friend rightly said, that has given rise to concern among people who might be away for longer than that. No decision has yet been made to change that, but officials are researching a range of options for potentially extending the period for which pension credit can continue to be paid to customers who go abroad within that 52-week envelope. We need to look carefully at the matter and see whether we can do something to meet the demand, but we need to research it properly.
	We have a good story to tell in terms of meeting the pension needs of ethnic minority communities generally. The Pension Service has worked hard to identify the barriers that exist in some communities to claiming entitlements, and has produced more accessible material. For example, my hon. Friend the Minister for Pensions launched a "Race to Improve" guide at the Southall gurdwara. That shows the determination to ensure that our services are accessible at every level to every community. That is an important theme in the Government race equality and community cohesion strategy, which I launched just a few days ago.
	The second point that my hon. Friend the Member for Wolverhampton, South-West raised was ethnic monitoring, on which my hon. Friend the Member for Birmingham, Perry Barr (Mr. Mahmood) also commented, and the demand that British Sikhs should be able to be separately monitored. I assure the House that Sikhs have the same status as all other ethnic groups in the statutory code of practice on the duty to promote race equality under the Race Relations (Amendment) Act 2000. The code encourages public authorities to use the same ethnic classification system as was used in the 2001 census.
	The concern is that that does not deal with the specific need. The reason for taking that approach is to ensure consistency, allowing comparisons to be made over time and across different areas, but it is important to note that the code provides public authorities with the flexibility to adapt categories to fit local circumstances, provided that they are the same as, or similar to, those used in the 2001 census. It is open to public authorities to choose to use the question on religion to determine the number of Sikhs in their area. That is an eminently sensible approach. It is clear that the question on religion, which is the optional question in the census, has been widely answered. It has not had the dip in answers that was predicted by those who opposed its incorporation.
	The Office for National Statistics recognises that the concept of an ethnic group is complex and delicate, and that it changes over time. The ONS has met Sikh groups, and it took into account their needs in developing a new publication, "Ethnic Group Statistics: A Guide for the Collection and Classification of Ethnicity Data". The guidance recommends that, where possible, national and religious identity questions be asked in addition to the standard ethnic group question. The ONS will consult widely with the intention of reviewing the classification system for the 2011 census, and it should be able to accommodate some of the views expressed when adapting the current ethnic categories. I know that the Sikh community will wish to register its views during the process, and I certainly encourage members of that community to contribute to the debate leading up to 2011.
	My hon. Friend asked whether we would consult the Punjabi community widely. I am glad to answer that question. Much of what we have been doing in faith communities and ethnic groups is engaging and consulting, and making sure that our work reflects the concerns and demands of different communities in Britain. In 2003 and last year, a review of the Government's consultation with faith communities was carried out by a steering group, which I chaired, including ministerial colleagues and senior faith community representatives. The group produced a report, "Working Together", which contained valuable recommendations to help Departments and faith communities to work more closely and effectively together. We will soon be reconvening to measure progress. I will be inviting the faith communities themselves to audit what we have achieved, if I can put it that way, to ensure that a wide range of views, including those of women in those communities, are fed into government.
	A further way of engaging that my hon. Friend highlighted was public appointments. Different Government Departments set targets to make public appointments more representative, and I am pleased that the proportion of ethnic minority public appointments has continued to increase from 7.4 per cent. in 2003 to 7.7 per cent. in 2004. We need to ensure that our diversity objectives are achieved, and some of the mechanisms for driving forward a more effective race equality strategy that I recently announced in "Improving Opportunity, Strengthening Society" will help us with that.
	One problem with public appointments is that change takes time because only a limited number of positions—about 18 per cent. of the total—become available each year. Even if one achieves a representative proportion of people for current appointments, making change is a slow process. However, each Department publishes an action plan with the aim of increasing the number of appointments held by people in under-represented groups. It is published annually, and this year includes targets to be achieved by 2007 and details of recent activities. Although my Department does not currently break public appointments down into specific ethnic or gender groups, we undertake an appropriate and wide circulation of all our public appointment vacancies and work hard to ensure that the diversity that is at the heart of Britain's strength is reflected in our public appointments.
	I could tell that the English language requirement was my hon. Friend's major concern. I am glad that his constituent's appeal was successful, because it is precisely such people with a good command of the English language who can take up responsible leadership roles in the faith communities. They can enable their communities to fulfil important parts of their role in civil society, such as engaging with people beyond a specific faith and playing a significant role in building a better, wider society. One reason why we introduced the new English language requirement for ministers of religion entering the UK from abroad was because although we are committed to continuing the special opportunity for people to get work permits, we also want to ensure that such a wider role can be fulfilled.
	The measure is not an attack on the Punjabi language, which is, I think, the second most commonly spoken language in Britain, or on that language being used in worship. If Sikh congregations wish to use Punjabi in their worship, that is a matter for them, not for the Government, as my hon. Friend rightly said. The requirement has been in force since last August with the purpose of ensuring that overseas ministers of religion who come to the UK have the skills needed for ministry in a diverse and cohesive society. We want to create a situation in which at least one senior cleric in every gurdwara, mosque, Hindu temple and so on is sufficiently fluent in English to be able to interact satisfactorily with local government, other faith communities, businesses, voluntary bodies and other parts of the local community. Fluent English also enables those people to preach in the language that many in their congregations will speak in their daily lives. It also allows them to reach younger members of their congregation who often feel less connected with faith institutions than others.
	My Department will soon begin a second stage of consultation with faith communities on further measures that we want to introduce to ensure that ministers of religion who are admitted from abroad are able to play a full role in their communities and that they gain an understanding of British civic life. We accept of course that there will be workers in gurdwaras who are not involved in preaching, do not have the leadership duties that I discussed and might not be affected by the new requirements. As part of the second stage of consultation, faith communities will be invited—as they were during the first stage—to express any worries that they have about the impact that the measures might have on religious workers with non-pastoral roles who try to enter the country under the minister of religion category. Kirtani is a classic example within the Sikh religion.
	I hope that the Sikh community will take advantage of this opportunity. We consulted Sikh groups alongside other faiths in the first round of consultation. Five Sikh representative bodies were included in the first round of consultation, together with major gurdwaras in Birmingham and Southall. Other organisations were invited but chose not to participate. I believe that the second round of consultation might provide an opportunity to drill further down into the question of whether there might be some flexibility for people who have religious roles but do not fulfil all the requirements that I have been discussing.
	My hon. Friend mentioned the Vaisakhi festival and the question of road closures. The position is clear. Whoever wants roads closed for a religious or other festival needs to apply to the relevant highway authority—the Department for Transport for trunk roads or the local authority for local roads. We do not intend to issue special guidance to the police on that subject, but I know that ministerial colleagues would be willing to listen to further representations if present arrangements are not working well enough. We do not have plans for further Vaisakhi celebrations at Government level, but, like my hon. Friend, I think that what we have done so far has been useful. We are always willing to mark faith festivals in a suitable way, and I look forward to any suggestions that might be put to me about this.
	My hon. Friend asked what further support we can give to faith schools. The Government continue to support those schools in the maintained sector that have changed their status to one based on a particular faith. That support is given provided that the change of status has gone through a school organising committee.

John McDonnell: I know that time is short, but I want to place on record on behalf of the whole House my congratulations to Guru Nanat school in Hayes on the fantastic results that it received this year and on the work that is going on there. I congratulate the Government on the investment in that school, which has produced remarkable results for the whole community.

Fiona Mactaggart: As an MP who helped, together with my hon. Friend, to persuade the Government that that was the right route to take back in 1998, I feel proud of Guru Nanat school's achievement, too. It is an exemplar of how excellent a faith school is capable of being. Other Sikh schools have been supportive. The Government will continue to consider each proposal on its merits. I have personal experience from my constituency of the positive way in which the Department for Education and Skills has responded to demands for Sikh schools.
	My hon. Friend the Member for Wolverhampton, South-West raised the issue of the kirpan. As he is aware, my Department and the Department for Transport agreed with Sikh representatives that Sikh staff in security zones at UK airports could carry the kirpan as long as the blade did not exceed 7.5 cm. Unfortunately, in January 2003 EU regulation 2320 set out new requirements for airport security. It bans knives, among other prohibited articles, including ceremonial ones with blades longer than 6 cm. In June 2004, we argued strongly before the regulatory committee for retaining the 7.5 cm length, but were outvoted. The Government are therefore in breach of the regulation, and we need, in consultation with the Sikh community, to find a way of meeting it. The Department for Transport recently met Sikh representatives to discuss the matter, and I shall be watching developments. I believe that because the London Eye operates aircraft-type security, the episode to which my hon. Friend referred is a straight read-across from that issue.
	On human rights in India, the Government condemn the persecution of individuals or groups because of their religion or belief and deplore any widespread attack on Sikhs in India. We welcome the remarks by Dr. Manmohan Singh in his first press conference as Prime Minister. When asked about the 1984 events, he said:
	"We are all anguished by such violence . . . We are the most tolerant civilisation"—
	The motion having been made after Seven o'clock, and the debate having continued for half an hour, Madam Deputy Speaker adjourned the House without Question put, pursuant to the Standing Order.
	Adjourned at twenty-nine minutes past Eight o'clock.